The US Securities and Exchange Commission (SEC) officially washed the hands of Memecoins.
The Federal Securities Regulator said the Memecoins – which it defined as a “type of crypto asset inspired by Internet memes, characters, current events or trends where advocates seek to attract an enthusiastic online community to buy memecoin and engage in its trading” – is more like the collectives than the secretities, according to a secret. Staff statement From the SEC’s corporate finance division published on Thursday. Because memecoins have “limited or without use or function,” they do not meet the meaning of a security under the test of Howey and therefore outside the constituent of the SEC.
The statement is a formalization of Comments made by Commissioner Hester Peirce -The head of the newly created Crypto Task Force of the SEC, which has been in Vanguard about the agency’s face in crypto regulation since it was formed in January-early this month in an interview with Bloomberg TV. In the interview, Peirce said that “many” memecoins in the market were falling outside the area of the SEC.
“If people want to buy a token or product with no clear long-term amount, they should feel free but should not be surprised for a few days if the price drops,” Peirce wrote in his roadmap for crypto regulation published earlier this month. “In this country, people generally have the right to make decisions for themselves, but the opposite of ambiguous American freedom is the same amazement -a wonderful American hope that people should decide for themselves, not look at Mama government to tell them what to do or not to do, or bail when they do something bad.”
Such legal interpretation from the Securities Regulator has no weight of formal regulation, but industries administered by the SEC and other federal regulators tend to follow these types of staff statements. The deadly staff of Accounting Bulletin No. 121 – Guide known as the Sab 121 offered by agency accounting staff – resulted in disturbance in the crypto sector and the banks felt forced until the bulletin was removed by the current leadership of the Sec. In this case, a footnote in the memecoin staff statement pointed out that it was “not a rule, regulation, guide, or statement” approved by the commission.
Although Peirce clearly made it clear that American investors are responsible for making their own right diligence in the tokens they purchased, the SEC did not determine the possibility of entering and using its implementation powers in the case where Memecoins were used to prevent security laws.
“Despite mentioned, this statement does not reach the offer and sale of meme coins that are inconsistent with the descriptions set above, or products labeled” meme coin “in an effort to avoid the application of federal security laws by denying a product that otherwise develops a security,” the staff said. “As mentioned above, the division will examine the economic facts of the particular transaction.”
