A meme coin is a crypto asset based on an internet meme, character, trend or current event. Its price depends mostly on community attention and speculation, not on any product or cash flow. The US Securities and Exchange Commission's Division of Corporation Finance described them this way in a staff statement on 27 February 2025. The statement says meme coins "typically have limited or no use or functionality" and that buyers usually purchase them "for entertainment, social interaction, and cultural purposes." Dogecoin, launched in December 2013, was the first well-known example. Thousands of tokens have since copied the format, and on-chain research shows that many of them are short-lived or abandoned soon after launch.
The latest developments
US regulators: most meme coins are not securities (27 February 2025)
The SEC's Division of Corporation Finance said that transactions in meme coins of the kind it described "do not involve the offer and sale of securities under the federal securities laws." In the staff's view, buyers are not investing money in a common enterprise, and any profit they expect does not come from the managerial efforts of others.
The statement has clear limits:
- It is a staff view. It is not a Commission rule and has no legal force.
- It does not cover products that are called meme coins in order to avoid securities law, or tokens that do not match the description.
- Each case still depends on its own economic facts.
- Fraud involving meme coins can still be pursued by other federal and state authorities.
For buyers, this means the disclosure and registration protections that come with securities generally do not apply to meme coins in the US.
Dogecoin in exchange-traded funds (September and November 2025)
- 18 September 2025: The REX-Osprey DOGE ETF (ticker DOJE) began trading on Cboe BZX. Its issuer called it the first US-listed ETF to offer exposure to spot Dogecoin. It is structured as a fund under the Investment Company Act of 1940.
- 24 November 2025: The Grayscale Dogecoin Trust ETF (GDOG) began trading on NYSE Arca. Its SEC filings say the registration statement became effective on 21 November 2025 and that the listing was approved under NYSE Arca's generic listing standards.
These listings let investors gain exposure to Dogecoin through ordinary brokerage accounts. They do not change how the underlying coin works or how volatile it is.
SafeMoon's CEO sentenced (February 2026)
SafeMoon was a token marketed in 2021 alongside the meme coin boom. On 1 November 2023, the SEC charged the company and its executives with fraud and unregistered securities offerings. The SEC alleged that:
- The token's price rose more than 55,000% between 12 March and 20 April 2021, and its market capitalisation reached more than $5.7 billion.
- Investors were told the liquidity pool was locked, but large portions of it were not.
- More than $200 million in crypto assets was withdrawn from the project.
A federal jury in New York convicted CEO Braden John Karony in May 2025 of conspiracy to commit securities fraud, wire fraud and money laundering. An IRS announcement dated 10 February 2026 says Judge Eric Komitee sentenced him to 100 months in prison and ordered forfeiture of about $7.5 million. Co-defendant Thomas Smith pleaded guilty in February 2025. Founder Kyle Nagy remains at large, according to the same official announcements.
How meme coins work
Meme coins are not a separate technology. Most are either:
- Their own blockchain. Dogecoin is one: it runs its own proof-of-work network.
- A token on an existing blockchain. Shiba Inu (SHIB) is one: it is a token on Ethereum. Creating a token like this takes little technical skill, which is why new ones appear in such large numbers.
Dogecoin (DOGE)
- Origin: Billy Markus and Jackson Palmer launched Dogecoin on 6 December 2013. The project's own history page says both "thought that cryptocurrency was being taken far too seriously."
- Supply: Dogecoin has no maximum supply. Its FAQ says that from block 600,000 onward, every block adds a permanent reward of 10,000 DOGE, with a target block time of one minute. That works out to roughly 5 billion new DOGE a year.
Shiba Inu (SHIB)
- Origin: SHIB launched in August 2020. Its creator uses the pseudonym "Ryoshi," and the project describes it as a decentralised meme token inspired by Dogecoin.
- Supply: The starting supply was one quadrillion tokens. Half was placed in a liquidity pool on a decentralised exchange and half was sent to Ethereum co-founder Vitalik Buterin.
- The Buterin burn: In May 2021, Buterin burned about 410 trillion SHIB and donated tokens to an Indian COVID-19 relief fund. These details come from the project's own news site and were not checked against on-chain records.
Have you run the meme coin checks?
Answer four questions about a meme coin you are looking at to see which check from this article is still open.
Have you confirmed the contract address on the project's official channels and on a block explorer?
- Yes, both match → next question
- No, or I found it through a search or a post → Confirm the address first
On the block explorer, what share of the supply do the top wallets control?
- The supply is spread across many wallets → next question
- A few wallets hold a large share → Concentrated holdings
- I have not looked → Checks still open
Does the project say its liquidity is locked?
- Yes, and I checked the lock contract and its expiry on-chain → next question
- Yes, but I only have the announcement → Lock claim not verified
- No such claim is made → next question
Can a single address mint new tokens or change fees in the contract?
- No, I checked who controls the contract → Checks done, risk remains
- Yes → One address holds control
- I do not know → Checks still open
Copycat tokens often use the same name. Until the contract address matches the project's official channels and a block explorer, you may be looking at a different token.
When a few wallets hold a large share of the supply, a single seller can move the price sharply.
A "locked" claim is only as good as the on-chain evidence for it. In the SafeMoon case, the SEC said investors were told the pool was locked when large portions of it were not.
Some contracts let a single address mint new tokens or change fees. That control stays with the address whatever the project announces.
At least one check from this article is not done yet. Holder concentration and contract control can both be read on a block explorer.
Passing these checks does not make a meme coin safe. Prices run on attention and can fall sharply within days, so the article's last check is to size any position on the assumption that it could go to zero.
This walks through the article's checklist only: it cannot read a contract or a block explorer for you, cannot detect fraud, and is not investment advice.
Meme coins vs other cryptocurrencies
| Meme coins | Other cryptocurrencies | |
|---|---|---|
| Main price driver | Attention, social media and community momentum | Can be linked to network use, fees, staking or adoption, even if speculation also plays a part |
| Stated purpose | Often none beyond the joke or the community | Usually a stated function, such as payments, smart contracts or settlement |
| Supply | Very large or uncapped (DOGE adds about 5 billion a year; SHIB started at one quadrillion) | Varies; some have fixed caps |
| US securities status | Generally not securities, per the SEC staff statement, so no registration-based disclosures | Depends on the specific asset |
None of this makes a meme coin worthless or another token safe. The point is that a meme coin's price has very little underneath it once attention moves elsewhere.
The main risks
- Rug pulls and pump-and-dump patterns. Chainalysis studied tokens launched in 2023 that were listed on decentralised exchanges. It found that 53.6% of them showed patterns associated with pump-and-dumps, such as a single address withdrawing most of a pool's liquidity. For 2024, it flagged 74,037 of about 2.06 million new tokens, around 3.6%. Chainalysis says these are behaviour patterns, not proof of intent. It also says most launched tokens simply go dormant. Its 2025 article was corrected after publication, and some of its figures are inconsistent with each other.
- False promises about locked liquidity. In the SafeMoon case, prosecutors and the SEC said investors were told the pool was locked when much of it was not. A "locked" claim is only as good as the on-chain evidence for it.
- Concentrated holdings. When a few wallets hold a large share of the supply, a single seller can move the price sharply.
- Fewer legal protections. In the US, the SEC staff view means meme coin buyers generally do not get securities-law disclosures. Remedies for fraud still exist through other agencies.
- Volatility. Prices can rise and fall by large percentages within days, often after a social media post. The SafeMoon figures above (a rise of more than 55,000%, then a fall of nearly 50% on a single day) show the scale.
Checks before buying any meme coin
- Confirm the contract address on the project's official channels and a block explorer. Copycat tokens often use the same name.
- Look at holder concentration on the block explorer. Note what share of the supply the top wallets control.
- Verify any "locked liquidity" claim on-chain: check the lock contract and when it expires, not just the announcement.
- Check who controls the contract. Some contracts let a single address mint new tokens or change fees.
- Size any position on the assumption that it could go to zero.
This article describes how meme coins work and what can go wrong. It is not investment advice.
Limitations: Shiba Inu's origin details come mainly from the project's own sites, and Chainalysis's figures describe on-chain patterns, not confirmed fraud.
