The Securities and Exchange Commission issued long sought after guidance Thursday evening saying it does not deem most meme coins securities under U.S. federal law.

Meme coins “typically have limited or no use or functionality” and are “more akin to collectibles,” according to the agency’s Division of Corporation Finance.

“It is the Division’s view that transactions in the types of meme coins described in this statement do not involve the offer and sale of securities under the federal securities laws,” the statement says. “Persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission. … Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws.”

It also said “a meme coin does not constitute any of the common financial instruments specifically enumerated in the definition of ‘security’ because, among other things, it does not generate a yield or convey rights to future income, profits, or assets of a business. In other words, a meme coin is not itself a security.”

The clarification comes after the latest rapid rise of such cryptocurrencies following the election of President Donald Trump, as well as their crash in recent weeks. It’s also another notch in the belt of the new administration, which has promised to create clearer and perhaps more favorable regulatory conditions for the crypto industry, and to do so swiftly.

“The SEC’s recent statement on meme coins is the clarity that the digital asset space has been demanding for years,” said Ishmael Green, a crypto attorney and partner at the law firm Diaz Reus. “This will drive continued investment in the U.S. crypto space, as the vast majority of meme coins launched in the last 12 months with multibillion dollar market caps have been released on Solana, an American blockchain.”

“[It] also comports with the current administration’s promise to the crypto community to end needless and frivolous enforcement actions which stifle innovation and investment,” he added.

Dogecoin, the original meme coin and sixth largest cryptocurrency by market cap, rose 3%. The token tied to Solana, which has become the go-to host for meme coins – including the Official Trump meme coin – rose 2%.

Shares of both Coinbase and Robinhood rose about 1% in after hours trading.

The clarity could pave the way for both exchange operators to list more meme coins without the risk of regulatory enforcement.

In January, at the height of the Trump-fueled meme mania, Coinbase CEO Brian Armstrong said that “given there are [about 1 million] tokens a week being created now, and growing … evaluating each one by one is no longer feasible,” in a post on X. “And regulators need to understand that applying for approval for each one is totally infeasible at this point,” he said.

Meme coins, of which there are thousands, sit at the furthest end of the risk spectrum. They’re three to four times more actively traded than bitcoin and ether, adjusting for market cap, which makes them lucrative offerings for newcomers to the market who feel they may have missed the boat on bitcoin. Historically, they’ve been a gauge of retail interest and risk appetite in crypto, though most market participants warn strongly against them.

Despite their purely speculative nature and lack of intrinsic value, they’re widely viewed as a significant sector of the crypto market and an important part of internet culture that reflects the origins, culture and permissionless nature of the crypto community.