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What is a memecoin?
A memecoin is a crypto token inspired by an internet meme, character, current event or trend. It usually has little or no use beyond being bought and sold, so its price moves mainly on demand and speculation.
What it means for you
SEC staff have said meme coin buyers and holders are not protected by US federal securities laws, so the disclosure rules that cover securities do not apply. Prices can swing sharply; the token's contract and holder list on a block explorer show who holds the supply and what the contract allows.
A common mistake: “Memecoins are regulated like stocks, so someone checks them before they trade.”
In fact: In the US, typical memecoins are not securities, so no securities registration or disclosure applies. Anyone can create one, and the contract and holder list on a block explorer are the main record.
How it works
A memecoin's creator builds an enthusiastic online community around buying and trading it rather than around a working product. SEC staff said in February 2025 that typical meme coins are bought for entertainment, social and cultural purposes, with value driven by speculative trading and collective sentiment, and are not securities; fraud around them can still face action under other laws. The Commission's March 2026 interpretation classes them as digital collectibles, and notes that one can later become a digital commodity if it becomes functional within a working crypto system.
Sources: SEC: Staff Statement on Meme Coins, SEC: Application of the Federal Securities Laws to Certain Types of Crypto Assets (Mar. 17, 2026) · checked 4 October 2026
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