Link: Meme coins aren’t subject to securities regulations, says SEC

The Securities and Exchange Commission (SEC) clarified that meme coins do not qualify as securities and therefore do not require registration. This decision stems from the fact that these coins do not yield profits or convey rights to future income.

Meme coins are likened to collectibles by the SEC, highlighting their limited functionality and practical use. The guidance emphasizes their nature more as cultural tokens than financial assets.

This announcement follows an increase in meme coin releases, such as those by Donald Trump and his wife, which significantly dropped in value post-launch. These developments underline the growing fascination with meme-based digital currencies.

By defining meme coins as non-securities, the SEC potentially reduces regulatory pressure on creators and holders of these coins. This could shield them from certain legal challenges related to securities laws.

Meme coins are often involved in volatile market scenarios, including "pump and dump" schemes driven by speculation. They are primarily purchased for entertainment, lacking substantial utility beyond their cultural significance.

The inherent market risks and speculative nature of meme coins are acknowledged by the SEC in its latest guidance. Despite their popularity, these coins are recognized more for their entertainment value than financial potential.

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