"Meme coins not protected"... US SEC issues warning

"Not considered securities under law

Collectibles with no use or function"

The U.S. Securities and Exchange Commission (SEC) has issued a warning about the rapidly growing 'meme coins.'

On the 27th (local time), the SEC released guidelines on meme coins, stating that "most meme coins are not considered 'securities' under U.S. federal law." The SEC explained that "most meme coins have limited or almost no use cases and functions, and are similar to collectibles."

Therefore, the SEC emphasized that "people involved in issuing and selling meme coins do not need to register their transactions with the SEC," and "buyers or holders of meme coins are not protected under federal securities laws." This is interpreted to mean that even if investors suffer losses from fraud related to meme coin investments, it is the investor's responsibility and they cannot receive legal protection.

Meme coins are cryptocurrencies inspired by internet and social media memes and jokes, with thousands in existence. They are considered one of the highest-risk asset classes. Dogecoin, which has the sixth-largest market capitalization in the coin market, is a representative meme coin, and the recently launched Trump coin is also included in this category.

The SEC statement comes as cryptocurrencies, including Bitcoin, have surged following the U.S. presidential election, with meme coins also riding the upward trend before recently plummeting. Hester Peirce, an SEC commissioner who leads the cryptocurrency task force, recently said in a Bloomberg TV interview that "many meme coins in circulation are outside the SEC's jurisdiction."

Ismael Green, a cryptocurrency specialist attorney, interpreted this announcement as "a measure providing clarity that the digital asset industry has been demanding for years" and added that "it aligns with the current administration's promise to stop unreasonable regulatory measures on cryptocurrencies."

By Kim Dong-hyun, reporter 3code@hankyung.com