They treat them as collectibles with ”limited or no use.“ That makes sense, but isn’t quite supporting the crypto-world’s preferred narrative.
> Although individual meme coins may have unique features, meme coins typically share certain characteristics. Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles. Meme coins also typically have limited or no use or functionality.
Unless "purchasing" and "paying for" are no longer forms of "social interaction" (i.e. interacting with society), I'm not sure how this differentiates it from literally any financial instrument, fiat included. This is an ambiguous and poorly divided line with loopholes you can drive a burning cybertruck through.
If you read further in the SEC statement, they explain why typical meme coins fail the Howey Test.
> [T]he promoters of meme coins are not undertaking (or indicating an intention to undertake) managerial and entrepreneurial efforts from which purchasers could reasonably expect profit.
They should probably be regulated as a gambling game, though, and can sometimes be used as money laundering or bribery, as a way to pay the original sellers without revealing what they’re really paying for.
Yeah, basically the SEC is saying "the idea that anyone would make money on these is so self-evidently ludicrous that they can't even be considered securities, so they don't fall under our purview".
However, kicking them out under that legal theory doesn't mean that there's no other way to stop them. I'd say it just got a lot easier to prosecute anyone pitching a memecoin as a way to "get in on crypto" and make money just got a lot easier under the much less exotic legal theory of plain and simple fraud.
(Sometimes we ask for too many specific laws specifically outlawing this or that when all we really need is good ol' fashioned "fraud"; you said X to entice someone to buy a thing and X is a lie, here comes the hammer.)
I'm quite sympathetic to the SEC here. Theories about how BitCoin may gain or lose value, or the Ethereum chain or other contract chains, are one thing, but when the value proposition of a coin starts and ends with "It's named after a celebrity!", that's just so much vaporous nothing.
Often everyone involved knows that it’s a pump-and-dump game, so arguably they’re not being misled. But memecoins could be legally defined as fraud, just as pyramid schemes are. (Apparently pyramid schemes are called an “endless chain” scheme in the California legal code.)
> If you read further in the SEC statement, they explain why typical meme coins fail the Howey Test.
That's basically a circular definition of what a memecoin is, and doesn't encompass a lot of the tokens that have been created so far, especially if you weight them by their market cap. In other words, it doesn't cover the most relevant tokens (which you would still call memecoin without this new (re)definition).
> A disclaimer said that the coin was "not intended to be, or the subject of" an investment opportunity or a security and was "not political and has nothing to do with" any political campaign, political office or government agency.[6] The terms of the offering prohibit coin buyers from joining any class-action lawsuits against the project and assert indemnity against any claims.[8] Trump promoted the coin on the night of its ICO while a "Crypto Ball" was underway.[9]
> After its launch, its price soared by over 300% overnight.[10] Within two days, it became the 19th most valuable form of cryptocurrency in the world, with a total trading value of nearly $13 billion, and a total of $29 billion worth of trades based on a $64 value of each of the 200 million tokens issued by the afternoon of January 19th. The New York Times reported that Trump affiliates controlled an additional 800 million tokens that, hypothetically, could be worth over $56 billion, potentially making Trump one of the richest people in the world at an estimated net worth of $63.8 billion.[11] On January 19, 2025, Trump's wife Melania launched her own meme coin, $Melania.
So the promoter of the meme coin, Trump, could not reasonably expect a profit? And because of this, he can make billions overnight on cryptocurrency without being subject to SEC regulations?
Anybody who wants to bypass SEC regulations just needs to base their cryptocurrency on a meme and claim no expectations of profits...
Edit: I'm wrong about the expectation of profits part. It's assumed that the purchaser should have no expectations of profits.
So the promoter essentially just need to claim the cryptocurrency is a joke to not be subject to SEC regulations.
Reread the parent. They mean the purchaser has no expectations of profit because the promoter isn't running a business enterprise based on it. Unlike investing in a stock.
Not that I would ever light my money on fire like that...
I think the main difference is whether they are being sold as having some value behind them or not. You buy shares in Theranos or Enron and find it's a fraud you have a right to be pissed off and complain the SEC isn't doing it's job. You buy fartcoin and really you can't complain to anyone because there was no expectation of anything there.
While I understand that, it's not trivial to unambiguously classify when something has no property of "value". It's easy to contrive your fartcoin example, but if this were universally true you couldn't use the words "memecoin" and "rugpull" in the same context (because there's no rug to pull when something has no value) and yet that is all I see. Say recently
> Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles.
This reads to me like "we won't treat your crypto like a security if you tie it to pop culture". Intent in purchasing crypto for novelty purposes doesn't change what it is or how people will use it.
This opens the door for fully legalized bribery. Which is already happening. The SEC recently asked a judge to halt its own investigation into Justin Sun for fraud after he bought $75 million worth of Trump's WLF coin, $56 million of which went directly to Trump, immediately after the election. The case now will likely get dropped completely.
What's to stop foreign governments from doing the same thing, if they aren't already?
I am against meme coins, but ruling them to be collectibles like a trading card makes sense to me. How is a meme coin different than a baseball card? What about a virtual baseball card or other virtual item from CSGO or World of Warcraft?
To bolster my point, one could face the same corruption issue we face today with baseball cards: Trump could own a limited-edition baseball card; foreign governments then could then buy all the other prints of the same card, lowering the supply and raising the demand of Trump’s collectible. One can thus see how anyone can use any collectible as a means to corruption in the same ways that meme coins can be used.
I am illustrating why the SEC ruling is not completely unfounded on first pass. However, I think meme coins have a higher chance of being used for scams (and corruption, but that is a separate point) because there is an implicit promise that this product will induce a return and because the coin is rarely an ends in itself. But how do you regulate people’s intention? You can’t read people’s minds and force people to not to buy a collectible for the sole purpose of making a return on investment. I think people would find it ridiculous to tell pawn shops to not buy a Pokémon card if the shop treated the item solely as a means to flip, for example. Moreover, such market participants are beneficial because they offer liquidity to more sincere buyers and sellers.
I am not sure what logically consistent and beneficial regulations around meme coins would look like, but with more thinking than I have been able to put into this topic, I am sure one could come up with some. My instinct is SEC regulating the tokenomics to maximize transparency and force the creators to release the tokens in a way that won’t allow them to “rug pull” would be a good starting point. I think I would not be opposed to such relegations in any collectibles market, making the regulations logically consistent.
Regarding the president of the United States, Jimmy Carter was forced to sell his peanut farm to avoid conflicts of interest. I think that anyone who becomes the president of the United States should have to liquidate their whole net worth — collectibles and all — and put it into an independent fund that they have no control over. They will then get a set percentage amount of money from this fund every year, and everything left over when they die goes to their presidential library. They are not allowed to take money from anywhere else ever again. That would fix this corruption problem for good and has the added benefit of deterring people from running who just want to use the office for their own personal gain.
I think as long as anybody promoting a meme coin uses an appropriate disclaimer, it's probably a reasonable decision. The problem is going to be that nobody is going to enforce people making fraudulent claims about meme coins because they're gutting the SEC.
The interesting thing about corruption and frauds like this is that when people get conned and lose everything, they don't get angry at the person that stole from them, they get angry about the people that called out the fraud or enforced regulations meant to protect them from losing more money.
This title is misleading. "Not a security" does not mean "no oversight".
> “Although the offer and sale of memecoins may not be subject to the federal securities laws, fraudulent conduct related to the offer and sale of memecoins may be subject to enforcement action or prosecution by other federal or state agencies,” said the statement, from the S.E.C.’s division of corporation finance.
The headline currently shown here "SEC Declares Memecoins Are Not Subject to Oversight" is wrong, which is throwing discussions off here.
The actual decision is that memecoins are not "Securities", and therefor not subject to regulations that apply to Securities. This makes a lot of sense.
If you pick up a cool rock off the ground, and just sell it to someone, it's not a security. If people are buying and selling wheat, it doesn't make wheat a security.
As skybrian said, the US test for a security is the Howely test.
* It is an investment of money
* There is an expectation of profits from the investment
* The investment of money is in a common enterprise
* Any profit comes from the efforts of a promoter or third-party
I think even trying to regulate the crypto sector is a mistake, because it legitimises something that serves virtually no useful purpose and makes people think that crypto is a real asset class rather than just a huge casino.
Therefore, my counter proposal is that crypto should simply be treated as a PVP-enabled MMO.
Whether it serves a "useful" purpose or not has no bearing on its legitimacy. It's used to transfer massive amounts of currency between anonymous accounts. It's exactly the sort of thing that needs to be regulated.
It's reverse in my opinion. Tokens used for illegal stuff at first get into the finance sector if there is no oversight, e.g. banks start holding them, exchanges use them etc. Then when the government asleep at the wheel (or complicit) finally awakens it is too late to ban them as it was required by law in the first place and they are deemed "too big to fail". That's why even under Dems SEC was afraid to classify BTC and ETH as illegal securities and went only after smaller fish (an even that has failed).
If oversight was real and SEC investigated tokens earlier, they would have outlaw them way back then (translation - would have made all tokenbros comply with laws, thus rendering whole scheme worthless) and tokens wouldn't entrench as deep as they are now.
Most MMOs don't let you convert your in-game currency back to real-world money. For those that do, is there actually a regulatory framework around that?
PvP MMOs tend to all have a similar make-up of players. At the top are the elite griefers prey on noobs, and beside them are the elite duelists who challenge each other. The griefers and duelists don't interact too much. Below them are the middle-skill players. They have enough fun to keep playing, but lose more than they win; they put serious effort into becoming an elite. At the bottom are the noobs, who join with dreams of making it big (some may), but mostly serve as cattle for other players. A lot of the noobs will get discouraged after repeated ganking and leave the game.
The game only thrives if there's a steady stream of new players to replace the numerous quitters. If there aren't enough, the middle-skilled will become the new bottom and start losing way more often. So they'll start quitting. When enough of them do, the griefers won't have as much fun and will leave. That just leaves the duelists in an otherwise empty world. It's not as fulfilling to say you're the best fighter in a dead game.
Then a new PvP MMO appears. Everyone is new, so the griefers aren't yet overpowered. New players flock to it. Eventually, the duelists from the first game see another game with a much more vibrant community. So they'll go there.
Not really a game though, it's the Ur Metaverse-y thing, but ultimately a vast complex chat room, if we forget there's the Game being left off MMO it becomes a way less useful term. Too much starts falling into that category, social media sites can tumble in.
If only you knew that the end-game of crypto billionaires is to secede from society and use cryptocurrencies and blockchains as the foundation for an alternative parallel financial system that sucks its competitor dry. If you really hate crypto, that would just be giving them what they want with roses and a nice letter.
And, just to say, that is exactly what the new administration is planning on doing.
The level of fear of the SEC chairman. They were afraid to classify all tokens as securities because BTC and ETH were too big by then, thus created this meaningless distinction. In real life there is no difference except number of users.
This is completely incorrect. There is a difference between:
(1) "PoopCoin" that is a copy paste of an existing cryptocurrency, repackaged with meme (!) marketing, and intentionally used for the creators to make quick money, and is bought ONLY for the purpose of flipping it for money.
(2) A serious cryptocurrency with a whitepaper, written by expert cryptographers, and serves a unique utility vs others, has a huge market cap, is used for real transactions.
Memecoins are also "collectable" and for "social interaction" without "expectation of profit but you can get profit as long as you say the magic words that it's not expected" whereas cryptocurrency is "accumulated" and used for "payment that isn't technically social interaction" and you can "expect profit and you can say you expect it". I hope that's clear
A meme coin is a subset of crypto currency stripped down to remove everything but belief or lulz.
There is no "utility" (the coin is not used to run some crypto system).
It's not attached to something that earns profits.
It's not even expected to retain value.
It's essentially a global apples to apples game. Those who are best at recognizing ahead of time what everyone else will find funny, get more money. In theory.
I also wanted to say "function", because the main distinguishing factor is that 'real' crypto assets are designed to perform some economic or financial purpose whilst memecoins are not.
> because the main distinguishing factor is that 'real' crypto assets are designed to perform some economic or financial purpose whilst memecoins are not
This seems like dressing up intent in another phrase and treating it the same. Regardless of intent, crypto currencies mark avenues of mass transfers of economic value. Introducing intent just seems like an obvious way for people pushing crypto to avoid regulation despite pushing the same venues of mass transfers of economic value. It doesn't matter if people had good intents, the behavior itself still must be punished for guidelines to make any sense.
At the end of the institution of chattel slavery in the south, the justification wasn't economic, it was moral. (At least in popular, individual conception of the discourse.) To "free" enslaved people was to release uneducated, unprepared people to the world, unprepared to take care of themselves. It was clearly a moral motivation, even if extremely misguided and bigoted. Why would we particularly care about intent here when it's more difficult to come up with a plan for this "coin" where people are not obviously misled and misguided? Surely people would push that "great businessmen" or however you term rich people are better at guiding financial policy allegedly directed by democratic control. (Certainly, crypto offers basically no democratic control outside of control of crypto itself.)
> Certainly, crypto offers basically no democratic control outside of control of crypto itself.
"For the hardcore neo-reactionaries, democracy is not merely doomed, it is doom itself. Fleeing it approaches an ultimate imperative. [...] Predisposed, in any case, to perceive the politically awakened masses as a howling irrational mob, it conceives the dynamics of democratization as fundamentally degenerative: systematically consolidating and exacerbating private vices, resentments, and deficiencies until they reach the level of collective criminality and comprehensive social corruption. The democratic politician and the electorate are bound together by a circuit of reciprocal incitement, in which each side drives the other to ever more shameless extremities of hooting, prancing cannibalism, until the only alternative to shouting is being eaten."
What "economic or financial purpose" does bitcoin provide that could not be identically claimed by any "memecoin"? It's entire claim was to be a "payment network" that required no organization or anything behind it. This is equally true of any memecoin. People trade DOGE coin even though it was SUPPOSED to be meaningless.
Plenty of memecoins have literally been the bitcoin code with a few strings and numbers changed.
I think a way to look at it, from an SEC trying to do their job in a pragmatic manner, is 'a crypto currency is likely to be run by professionals, a memecoin is likely to be run by teenagers'.
SEC deals with oversight and regulation actions/cases against obstinant defendants all the time. That is hard because those folks know the law.
Trying to deal with a teenager or influencer who doesn't even have a concept of the securities law is not something they do regularly. It doesn't fit with their system of function, and would likely become an absolute doom spiral of wasted time and distracted effort. Imagine trying to do a deposition where every other response is 'skibidi'. Even if it worked what are they going to collect or recover? Other meme coins?
In short: Setting aside the fundamental logic of this position, the SEC is built to battle with Bobby Axelrod, not Huawk Tua girl and those are fundamentally different skillsets.
Just like the SEC handles stock exchange fraud and not door to door snake oil fraud ?
I guess that since some memecoins are now handled by high visibility people, the amount of fraud will soon be higher than securities fraud, especially since no entity deals with it.
Serious question, who is still buying memecoins? Why do they do it? The graph for each memecoin is essentially the same - a quick runup followed by a sharp drop to a flatline. Who still thinks putting money into these things is a good idea?
In the past we had to offload palettes of cheap Chinese-printed bibles or guilded sweatshop sneakers for the illusion of "selling collectibles".
Now we can skip the pretense of all that nasty physical-world foreplay and get straight to the cash. Need to grease the wheels of whatever deal you want to score with the US? Just drop a few MM onto some glorified digital pokemon cards. Not enough liquidity? Oh don't worry, the family-owned reserve spigot's about to open up with an announcement of The Greatest Coindrop of the month.
And now you need not be concerned about the SEC snooping around at your preference of pokemon card or who is buying them.
We've just made government corruption far more efficient.
trump sets the direction of SEC enforcement and he's made it clear that he thinks he (and everyone else) should be able to rob normal people via cryptocurrency.
You are correct, that follows the pattern of Wilhoit's Law:
“Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.”
The Federal Reserve is a bit odd since it's a mix of private corporations & public governance. The Federal Reserve Board of Governors (BOG) is part of the government, the Federal Reserve Banks are private corporations whose officer's salaries are approved by the BOG but whose officers are elected by the Member Banks (banks in the US are required to be members). The Federal Open Market Committee (FOMC) is a mix of the BOG & some of the presidents of the various Federal Reserve Banks.
So the BOG isn't independent of the executive branch (it legally can't be), but the FOMC is partly independent since it's a mix of executive branch employees & private bank employees.
That's generally correct, but the issue is more about what kinds of powers are being exercised. Congress can create government-owned corporations, like Amtrak. Those corporations can function independently, insofar as they are not exercising executive powers.
The core function of the Fed isn't an executive power. It's not enforcing the law, or interacting with foreign countries. It's a bank that lends to other banks, and influences the market through that economic function. That's not an executive power and doesn't need to be subject to executive control.
The Fed also performs some executive functions (promulgating and enforcing various regulations). I'd argue those must be under executive control. But that doesn't address the Fed's core interest-rate-setting function.
Is an Amendment to the Constitution necessary to limit a right according to disability or to create an independent agency which is independent from the Executive (Justice), Legislative, and Judicial branches?
> The General Services Administration (GSA) is an independent agency of the United States government established in 1949 to help manage and support the basic functioning of federal agencies.
> In the United States federal government, independent agencies are agencies that exist outside the federal executive departments (those headed by a Cabinet secretary) and the Executive Office of the President. [1] In a narrower sense, the term refers only to those independent agencies that, while considered part of the executive branch, have regulatory or rulemaking authority and are insulated from presidential control, usually because the president's power to dismiss the agency head or a member is limited.
> Established through separate statutes passed by Congress, each respective statutory grant of authority defines the goals the agency must work towards, as well as what substantive areas, if any, over which it may have the power of rulemaking. These agency rules (or regulations), when in force, have the power of federal law. [2]
However, like Acts of Congress and Executive Orders, such rules are not Constitutional Amendments.
> Examples of independent agencies: These agencies are not represented in the cabinet and are not part of the Executive Office of the president:
I said independent executive-branch agency. The very first sentence of Article II says: "The executive Power shall be vested in a President of the United States of America." Congress can't create an agency that exercises "the executive Power" that's independent of the President. In the same way that Congress can't create an unelected mini-Congress that enacts laws binding on citizens, and can't create courts outside the judiciary branch that can convict people for federal crimes.
These entities all differ in whether they're exercising "executive power" or not. Amtrak doesn't meaningfully exercise executive power. Congress can provide for Amtrak to be independent of the President's control. Or to use another example, Congress could probably create a bank that provides student loans that's independent of Presidential control.
But the SEC is a quintessential executive-branch agency. It enacts rules that interpret the securities laws and can prosecute people for violations of securities laws.
> In a narrower sense, the term refers only to those independent agencies that, while considered part of the executive branch, have regulatory or rulemaking authority and are insulated from presidential control, usually because the president's power to dismiss the agency head or a member is limited.
Congress must confirm candidate appointees to independent agencies, otherwise they are not independent of the Executive.
Can the President terminate Congressionally-approved nominations without regard for their service? They can.
it really is astonishing how good the RoI on corruption in the US is. the crypto industry donated a few hundred million dollars to Trump and now they get to pump and dump and steal from civilians at an unlimited scale, with the President himself encouraging it.
it's just astonishingly good value if you have no morals at all.
Do they want this though? R/cryptocurrency is not happy, and if you want crypto legitimacy; wasn’t part of the complaint of the crypto industry that the SEC was too slow to make rules?
I suspect the folks who are interested in the cryptocurrency "ethos" as it was in the Bitcoin Whitepaper are not happy (although I think that ethos is exceptionally naive, I can at least respect it). I think they see the scams as real roadblocks to adoption and just a bad look / way to operate.
I do suspect that the vast majority of the crypto currency "community" are now just motivated by greed and/or other immoral activity like bribery, fraud, crime etc.
So yes I think some of the more thoughtful crypto community are disappointed .. but in reality much (in terms of dollars) of it really don't care.
cryptocurrency fans probably don't like it, since they are the ones going to be robbed and also have to listen to their friends complain about them encouraging them to be robbed, too.
the cryptocurrency industry love it and paid for it because it allows them to do unlimited crime against others with no consequences.
this isn't just a This Term Of Trump problem, either - letting these sociopaths get even richer now means they'll form a new layer of poison in the financial system for decades to come and have enormous influence regulation and politics.
I’m not clear the distinction you’re making. Doesn’t coin base make more money is people think Crypto is real? Like rug pulls are relatively small potatoes for the big banks who could be making billions on fees if crypto is legitimized, I might even assume the opposite low level crypto fans or maybe better put “influencers” want to do unlimited crimes but the “industry” wants reasonable regulation.
>unlimited crime against others with no consequences
At present I will acknowledge one great obligation to it, that is the Chapter sixth—of money page 21st “When these denominations are admitted & employed in transactions to diminish the quantity of metal to which they answer by an alteration of the real coins, is to steal, a theft of greater magnitude & still more ruinous is the making of paper. It is greater because in this money there is absolutely no real value. It is more ruinous because by its gradual depreciation during all the time of its existence it produces the effect which would be produced by an infinity of successive deteriorations of the coin.” That is to say an infinity of successive felonious larcenies. If this is true as I believe it is we Americans are the most thievish people that ever existed, we have been stealing from each other for an hundred & fifty years. If anything like health remains to me, you shall hear more upon this subject from your friend & humble servant.
Describing this as "stealing" is an enormous stretch.
At worst, it's fraud, but I don't even believe that. Most people know the risks when they buy these coins. To them, it's a gamble the same as the as the lottery or sports betting. They know it has a negative expected value but they do it anyways because they find it fun.
> To them, it's a gamble the same as the as the lottery or sports betting. They know it has a negative expected value but they do it anyways because they find it fun.
Sports betting and lottery, while like gambling is legal in many states, is regulated.
Also, memecoins are unlike casino gambling, where there is a tiny chance of an outsider winning. That's where some of the "entertainment" in gambling comes from. In the case of sports betting there are also factors of chance outside the game that the game depends on. Again the adrenaline of betting on the unknown.
With memecoins, unless you are an insider, there is precisely 0 chance of winning. They are pure pump and dump schemes preying on the ignorant, or if the buyer is aware of how they work, they are no different from a bribery mechanism.
If you are buying this stuff retail, you are probably already too late to sell and make a gain, because insiders are ever innovating on strategies like "single sided liquidity" to get their money out before retail buyers can, i.e:
You have moved the goal posts from "precisely 0" to probably too late.
Also, lol at the reddit OP "I'm not the bagholder. I'm significantly in profit and want to take it. Any advice on the most cost effective way?"
Edit:
I dont have a lot of sympathy for cash strapped seniors who walking into a casino and blow their money.
NFT and meme coins have a Giant "CASINO" sign above them, and if someone goes in and get scammed or rug pulled before they can scam someone else, than that is on them.
There is a whole world of regulated markets. If you dont want to risk being scammed, dont go into the scam zone.
> You have moved the goal posts from "precisely 0" to probably too late.
For all practical purposes, if you're not an insider, the timing of "probably too late" coincides with "precisely 0" and the availability of the memecoin for retail purchase.
> Also, lol at the reddit OP "I'm not the bagholder. I'm significantly in profit and want to take it. Any advice on the most cost effective way?"
I don't laugh at that person, because I don't know their circumstances. It's sad to see someone defrauded, regardless of what you or I might think about their level of knowledge.
Similarly, I also don't laugh at cash strapped fixed income seniors who fell for fraudulent financial products. The reason for regulation (and government departments like CFPB) is to protect such people from fraudsters.
Hell, that's just lobbying. Happens across virtually every sector of industry. Business as normal in America. What we're seeing now is something new and different: destruction of government as entertainment.
Being stupid isn't a crime, and shouldn't deserve punishment. Your intelligence is significantly influenced by things entirely out of your control, like your genetics and your childhood and schooling, so I've never understood this insistence that we allow people to take advantage of stupid people.
Crypto shouldn't be regulated. It's explicit purpose is to bypass the regulation overhead of fiat, stick it to the man so to speak. The fallout of things like FTX is a natural consequence of the crypto community's wishes and the government stepping in to bailout and prosecute is contrary. FAFO imo.
Nothing says “stick it to the man” like having heads of state and some of the wealthiest people on the world be heavily invested and doing business with crypto.
Thing with FTX is it was sold as a regular investment via superbowl ads etc.
I'm not sure it needs special regulations, different from those for buying and selling used cars, beanie babies etc. but should still be subject to basic stuff like don't steal your clients money.
The biggest problem there was all the talk of FDIC secured deposits as a way to legitimize the centralized crypto exchanges. First, don't advertise falsehoods, obviously. Second, if your money is tied up as Beanie Babies, the question whether they are stored in high security vaults or a shed is a dangerous red herring.
With FTX the main issue was separating client funds. In all such business client funds should belong to the clients and not be taken by SBF or whoever to gamble with.
> Although individual meme coins may have unique features, meme coins typically share certain characteristics. Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles. Meme coins also typically have limited or no use or functionality.
https://www.sec.gov/newsroom/speeches-statements/staff-state...
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