Long before it was an acronym for a quasi-governmental organization, the term “DOGE” most often referred to Dogecoin, the elder statesman (relatively speaking) of the meme coin world. A favored subject of internet personality and prolific tweeter Elon Musk, the price of Doge often fluctuated wildly, especially when Musk made a social media post (a not infrequent occurrence). But meme coins like Doge appear to have moved beyond the fringe of internet culture of Reddit chatrooms and closer towards the mainstream investment world.
No doubt a sizeable part of this increased interest is due to the receptiveness to meme coins by the new regime in Washington, both at the SEC, and in the White House. Shortly after President Trump took office and issued his own meme coin (Melania Trump also issued a meme coin but it has had a fraction of the popularity), the SEC’s Division of Corporate Finance (CorpFin) issued a February 27, 2025 statement determining that meme coins are not securities, and thus are beyond the SEC’s power to regulate.
This staff statement, which was subject to a vigorous dissent by Commissioner Crenshaw, is not the final word on the subject, as the issue ultimately must be defined by a court (absent legislation resolving the question of whether meme coins are securities) – see Taking fartcoin seriously: Why meme coins matter.
However, it reflects not only the growing interest in meme coins but also their gradual movement into the mainstream of the financial services world. Meme coins may be expressions of frivolity and silliness, but the size of the meme coin market and the growing interest in it demands that it be taken seriously.
Billion dollar market
Indeed, when viewed on CoinMarketCap on June 9, 2025, there were multiple meme coins with over a billion dollar market capitalization, led by Dogecoin with a market cap slightly over $27 billion, Shiba Inu (another canine coin) with almost $7.5 billion, and the official Trump coin with a market cap of slightly over $2 billlion (down from a high of over $9 billion). The top ten meme coins approached around $50 billion in aggregate market cap. At least eight had 24 hour trading volume in excess of $100m, with several approaching $1 billion. These figures rival those of many well-known companies on the NASDAQ exchange.
Moreover, institutional interest in meme coins is growing. There are multiple applications for meme coin ETF’s before the SEC. President Trump recently held a White House dinner for the top holders of his meme coin, including crypto-entrepreneur Justin Sun, reportedly the largest coin holder.
While it might be premature to treat meme coins similarly to traditional asset classes, as meme coins become more popular pressure inevitably grows for them to incorporated by legacy financial service firms for investors.
While it might be premature to treat meme coins similarly to traditional asset classes, as meme coins become more popular pressure inevitably grows for them to incorporated by legacy financial service firms for investors. Indeed, offering expertise on meme coins might be an important method for obtaining younger clients.
A minefield of compliance issues
But meme coin assets present a minefield of compliance issues for broker-dealer firms. Among other things, the lack of clarity as to whether meme coins are regulated securities means that there is some question as to which regulators have authority to supervise firms, as well as which behavior standards apply. For example, Regulation Best Interest (Reg BI) was promulgated under the Securities Exchange Act of 1934. If an asset is not a security, Reg BI might not be implicated. Regardless of CorpFin’s pronouncement, since no court has ruled on the issue of whether meme coins are securities, any firm whose personnel engages in meme coin transactions is, at the least, at risk that some fact-finder, be it a court or FINRA, will find that Reg BI applies.
Moreover, a broker-dealer’s due diligence obligations require that the firm understand the product being transacted, including its risks, rewards, and costs. Due to the volatility and lack of transparency regarding meme coins, understanding the quickly-evolving risk metrics of these assets can be challenging. Meme coins are also more susceptible to manipulation because they are often based on internet memes, and can be the subjects of pump-and-dump schemes, and these additional risk will likely require heightened due diligence.
If investor interest in meme coins continues to expand, firms might have to modernize their compliance structures to reflect the special challenges meme coins presented
Indeed, FINRA has already brought several enforcement actions involving crypto assets, including settled matters relating to purported failures to fully disclose the benefits and risks of crypto products, or arising from the use of “finfluencers” to promote crypto assets without fully disclosing the attendant risks. Several of these actions came from targeted examinations reviewing how member firms communicate with retail customers regarding crypto assets.
While there do not appear to be any reported meme coin cases, it would not be surprising to learn that actions are on the horizon. For example, the New York State Department of Financial Services recently announced that it “is closely monitoring the recent, and rapid, proliferation of sentiment-based virtual currencies, commonly referred to as ‘meme coins.’”
Ultimately, if investor interest in meme coins continues to expand, firms might have to modernize their compliance structures to reflect the special challenges meme coins presented. Among other things, supervisory procedures will need to be updated and personnel trained to recognize the particular compliance issues connected with meme coins. Firms that fail to conduct such an update might soon find themselves in the dogehouse.
Howard Fischer is a partner in the litigation and white collar departments of Moses & Singer LLP. Howard is recognized as a leading expert and commentator on securities disputes, enforcement proceedings, and securities regulations, including related to digital assets.
