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The U.S. March unadjusted CPI year-over-year dropped to 2.4%, down from 2.8% last month and below the 2.6% market expectation. While this signals cooling inflation, the market reaction has been muted.
How will this impact the Fed rate cut expectations and the crypto market? Share your thoughts with #CPIDataComing for a chance to win a $50 reward!
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Decision from the SEC opening the way for memecoins
The US Securities and Exchange Commission (SEC) has officially decided that memecoins are not securities. It stated that these digital assets have "no real-world utility, return, or corporate support." According to the announcement made on Thursday, February 27, transactions involving memecoins are not required to be registered under federal securities laws.
SEC will not take any action against memecoins
In the SEC decision, it was stated that memecoins are 'similar to collectibles' and are generally purchased for 'entertainment, social interaction, and cultural purposes,' with their value determined solely by market demand and speculation.
The statement drew attention to the fact that 'Fraudulent behavior related to the sale of Memecoins may be subject to enforcement action or prosecution by other federal or state agencies under other federal or state laws.'
Memecoins failed the Howey Test
The SEC determines whether an asset is classified as a security by applying the Howey Test. According to the Commission, meme coins are not part of a larger enterprise. There is no central team that pools funds to develop a business, and buyers are not investing in a structured project expecting long-term growth.
The Commission stated that values, exaggerated like collectibles and dependent on collective sentiment, do not meet the criteria of the Howey test for an investment contract. The SEC statement included the words "Individuals participating in the offer and sale of Memecoins do not need to register their transactions with the Commission."
However, the SEC warned that scams involving memecoins could still be subject to sanctions by other federal or state regulators. Although memecoins may not be securities, misleading investors or similar fraudulent activities will still be on the Commission's radar.
This article does not contain investment advice or recommendation. Every investment and trading operation involves risk, and readers should conduct their own research when making decisions.