The US Securities and Exchange Commission (SEC) has officially stated that memes are not considered investment assets and do not fall under the protection of federal securities laws.
In their published statement, the SEC explained that memes are crypto assets inspired by internet memes, characters, and trends. They are typically purchased for entertainment purposes rather than as investments.
Some of the popular meme coins include Dogecoin, Shiba Inu, Grimace Coin, as well as $TrumpMaga and $Melania, which were launched by Donald Trump and his wife in January 2024. However, the SEC noted that these assets have limited or zero utilitarian value.
The regulator emphasized that meme coins are highly volatile and often come with speculative statements. Most of these assets range in price from 0 to 60 cents, with the leading Dogecoin priced at only 20 cents. The only exception was Doge Killer (Leash), which reached a price of $161.82.
Despite the lack of regulation, individuals involved in manipulating the meme coin market may face prosecution by other federal and state agencies. The SEC highlighted ongoing investigations into fraud within this area.
One notable case was the filing of a claim against Elon Musk for allegedly manipulating the Dogecoin price. In 2024, there were several high-profile incidents, such as a $700 million scam involving Grimace Coin related to McDonald’s, and the hack of singer Doja Cat’s Twitter account, resulting in a $1.6 million loss for investors.
The SEC also cautioned that attempts to conceal the investment nature of crypto assets under the guise of meme coins could lead to legal action.