SEC Commissioner Caroline Crenshaw Disagrees with Ruling on Meme Coin Safety

SEC Commissioner Caroline Crenshaw has expressed her disagreement with the agency’s recent guidance that categorizes meme coins as non-securities.

In a statement on February 27, Crenshaw contended that meme coins could satisfy the criteria of the Howey test, particularly regarding how investors rely on the efforts of developers and promoters for potential profits.

Her opposition arises in response to the SEC’s newly issued guidance, which characterizes meme coins as speculative assets linked to online trends rather than investment contracts.

New SEC Position Indicates Meme Coins Are For Entertainment

The SEC’s updated position suggests that meme coins primarily serve entertainment and social interaction purposes, a viewpoint that Crenshaw strongly contests.

“Today’s statement depicts meme coins as cultural initiatives aimed at entertainment and social engagement. The reality is that meme coins, like any financial product, are created to generate profit,” she stated.

The debate surrounding meme coins has escalated following several high-profile scams and a contentious presidential memecoin launch.

This issue has garnered the attention of lawmakers, especially after former U.S. President Donald Trump’s involvement in a memecoin project.

In response, Democratic Senator Elizabeth Warren and others have called for an investigation into possible ethical violations related to political token offerings.

On February 27, Representative Sam Liccardo of California announced that House Democrats are preparing legislation to prohibit presidential meme coins.

The proposed Modern Emoluments and Malfeasance Enforcement (MEME) Act seeks to prevent U.S. lawmakers, along with their spouses and dependents, from issuing, endorsing, or profiting from digital assets.

#SEC 2.0: Commissioner #Crenshaw issues Crypto 2.0 Statement https://t.co/nElWf4yfjp pic.twitter.com/zAUTJt9HIN

— MartyParty (@martypartymusic) February 28, 2025

Meanwhile, legal experts are considering how meme coins should be regulated.

Former Commodity Futures Trading Commission (CFTC) attorney Elizabeth Davis suggested that if the CFTC is given greater oversight of cryptocurrencies, meme coins could fall under its regulatory authority.

Davis also anticipated that clearer regulations regarding meme coins would emerge within the next year, providing more clarity to the industry.

Trump Appoints Pro-Crypto Paul Atkins as SEC Chair

As reported earlier by Cryptonews, President-elect Donald Trump has selected Paul Atkins as SEC Chair.

Atkins, who previously served under SEC chairs Richard Breeden and Arthur Levitt, is considered “crypto savvy” and possesses a “deep understanding of the internal workings of the agency.”

Trump, who recently launched his family’s crypto platform, Global Liberty Financial, has consistently promised to implement a crypto-friendly regulatory framework upon his return to the Oval Office.

This change comes as the SEC faces increasing criticism for its “regulation-by-enforcement” approach to the cryptocurrency sector.

Critics argue that the SEC has not established a clear regulatory framework for cryptocurrencies, instead opting to take legal action against key industry players.

A coalition of seven U.S. states has united to challenge the Securities and Exchange Commission’s (SEC) regulation of cryptocurrency.

The states have submitted an amicus brief, led by Iowa Attorney General Brenna Bird, asserting that the SEC’s attempt to regulate cryptocurrencies represents a “power grab” that could hinder innovation, harm the crypto industry, and exceed the agency’s authority.

The post SEC Commissioner Caroline Crenshaw Dissents on Meme Coin Non-Security Ruling appeared first on Cryptonews.