SEC Memecoins Decision
🔴 Abuse of Power ·
Feb 27, 2025
Summary
On February 27, 2025, the SEC’s Division of Corporation Finance declared that memecoins are ‘akin to collectibles’ and do not constitute securities, placing them outside the agency’s enforcement jurisdiction. The decision directly benefited Trump, who had launched his $TRUMP memecoin on January 17, days before his inauguration. Entities affiliated with the Trump Organization, CIC Digital LLC and Fight Fight Fight LLC, controlled roughly 80 percent of the token’s supply, and the venture had generated about $100 million in trading fees for insiders by early February, a total that climbed to about $320 million by May. By placing memecoins beyond SEC securities oversight, the ruling removed the main federal enforcement risk facing a product from which the sitting president stood to profit, even as roughly 800,000 other wallets lost some $2 billion on the coin. SEC Commissioner Caroline Crenshaw dissented, calling the statement ‘an incomplete, unsupported view of the law.’ Senator Elizabeth Warren and Representative Maxine Waters questioned whether Trump’s financial stake had influenced the decision and requested an inspector general investigation, and the SEC separately dropped enforcement cases against crypto firms tied to Trump donors, including Binance and Coinbase. Trump said he was ‘not profiting from anything’ and claimed he knew little about the coin beyond having launched it.
Key Figures
Donald Trump, Elizabeth Warren