Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the recent confirmation from the SEC that MemeCoins are not considered securities.
MemeCoins NOT Securities
On the 28th of February 2025 the United States Securities and Exchange Commission (SEC) announced a decision regarding memecoins which states they are not classified as securities under federal law. This had generated a bullish reaction within the cryptocurrency community as the SEC announced these coins are primarily traded for entertainment and speculative purposes, therefore they are considered similar to collectibles instead of financial instruments such as stocks or bonds.
The use of the Howey test allowed the SEC to determine that memecoins are items which typically do not consist of an 'investment contract.' They lack a centralised enterprise and do not promise profits from any managerial effort. This means they do not require registration under the Securities Act of 1993, however they do remain subject to federal and state enforcement regarding fraudulent activities. The SEC also noted that any coins labelled as memecoins which are structured to bypass Securities Laws while offering profit expectations aligned with managerial efforts will be subject to scrutiny.
Hester Peirce had earlier noted in an interview with Bloomberg that meme coins likely fall outside the agency’s scope, and the staff statement was published on Thursday.
These memecoins are now considered collectibles, and the news saw the value of Dogecoin (DOGE) surged by 15% within the first hour. Shiba Inu (SHIB) experienced a 12% increase. The trading volume for DOGE increased by 200% to 5 billion DOGE traded in the first hour while SHIB saw a 150% increase in trading volume, totaling 2 trillion SHIB traded in the same period.
The market movement shows how regulatory announcements can have an impact and influence on the overall crypto market, as on-chain metrics also showed significant activity. While it should be considered good news, it has not stopped the price of Bitcoin falling. The king of crypto continued its decline, dropping below the $80,000 for the first time in three months. It shows the dramatic reversal of price since the post-election rally which saw Bitcoin reach highs of $109,241 back on the 10th of January.
Have a great day.
Peace. CryptoGod-1.
Referral Links and Follow Me:
