U.S. Securities and Exchange Commission Commissioner Crenshaw challenges staff view that meme coin offers are generally not securities

U.S. Securities and Exchange Commission Commissioner Caroline A. Crenshaw issued a personal statement criticizing the Division of Corporation Finance staff statement on meme coins, arguing it advances an incomplete and unsupported view of the law by implying an entire product category is largely outside SEC jurisdiction. Crenshaw said the staff guidance offers no clear, legally grounded definition of “meme coin,” potentially encouraging firms to evade oversight through labeling. She argued that the meme coin label is largely irrelevant to whether an offer or sale is a “security” as an investment contract under the Supreme Court’s Howey test, which requires a facts-and-circumstances assessment of economic realities and purchasers’ reasonable expectation of profits based on the efforts of others, not disclaimers or “window dressing.” The statement points to promoter practices that may shape profit expectations, including retaining significant token supply, limiting supply through buybacks or token “burning,” promising exchange listings, and marketing broader roadmaps or technology developments, and notes that manipulation schemes such as pump-and-dumps and rug pulls are not uncommon. Crenshaw concluded that Howey’s individualized inquiry cannot be reconciled with a generalized conclusion that offers and sales of a vaguely defined set of hundreds of crypto assets are generally not securities.