U.S. SEC Declares Memecoins Are Not Securities, Investors Must Assume Full Risk
U.S. SEC Declares Memecoins Are Not Securities, Investors Must Assume Full RiskThe U.S. Securities and Exchange Commission (SEC) has clarified its stance on memecoins, stating that these digital assets do not qualify as securities and are more akin to collectibles. The guidance, issued by the SECโs Corporate Finance Supervision Department, confirms that memecoin transactions do not fall under the purview of federal securities laws, meaning investors are not afforded the same protections as traditional securities holders.Key Takeaways from the SECโs Guidance on MemecoinsMemecoins Are Not Securities: The SEC asserts that the sale and purchase of memecoins do not constitute securities transactions, exempting them from registration under the Securities Act of 1933.No Registration Required: Unlike stocks, bonds, or other regulated investment vehicles, memecoins can be offered and sold without SEC registration or exemption filings.Investor Risk: The SEC cautions that memecoin holders are not protected by federal securities laws, meaning they bear full responsibility for potential losses, fraud risks, and market volatility.