The United States Stock Exchange and Securities Commission (SEC) is officially washing its Memecoins hands.
The Federal Securities Regulator said that Memecoins, which defined as a “type of cryptographic asset inspired by Internet memes, characters, current events or trends for which the promoter seeks to attract an enthusiastic online community to buy the memecoin and participate in its trade” is more as collectible than the securities, according to a statement of personnel of the Corporate Finance Division of the SEC. Published on Thursday. Because memecoras have “limited use or functionality”, they do not comply with the definition of security under the Howey test and, therefore, are out of the jurisdiction of the SEC.
The statement is a formalization of the comments made by Commissioner Hester Peirce, the leader of the newly created Crypto task force of the SEC, who has been at the forefront of the agency’s face on cryptographic regulation since it was formed in January, earlier this month during an interview with Bloomberg TV. In the interview, Peirce said that “many” of the memecutes in the market fall outside the jurisdiction of the SEC.
“If people want to buy a token or product that lacks a long -term clear value proposal, they should feel free but they should not be surprised someday if the price falls,” Peirce wrote on their road map for the cryptographic regulation published earlier this month. “In this country, people generally have the right to make decisions for themselves, but the counterpart of that wonderful American freedom is the equally wonderful American expectation that people must decide for themselves, not to look at the Mama government to tell them what to do or not do, or rescue them when they do something that is wrong.”
These legal interpretations of the Securities Regulator do not have the weight of the formal regulation, but the industries supervised by the SEC and other federal regulators tend to follow this type of statements of personnel closely. The infamous Personnel Accounting Bulletin No. 121 – Guide known as SAB 121 offered by the agency’s accounting staff – caused agitation in the cryptographic sector and bankers who felt limited until the current leadership of the SEC erased the newsletter. In this case, a note of the staff of Memecoin of the personnel indicates that “it is not a rule, regulation, orientation or declaration” approved by the Commission.
Although Peirce has made it clear that US investors are responsible for making their own due diligence in the tokens they buy, the SEC has not ruled out the possibility of intervening and using their application powers in the event that memecoras are used to evade the laws of values.
“Despite the above, this statement is not extended to the offer and sale of meme coins that are inconsistent with the descriptions established above, or products that are labeled as” memes coins “in an effort to evade the application of federal securities laws by disguising a product that would constitute security,” said the staff statement. “As noted above, the division will evaluate the economic realities of the particular transaction.”
