The U.S. Securities and Exchange Commission exempts meme tokens from securities laws, Hunter Biden'

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SEC exempts meme token securities law attributes, Hunter Biden's "LAPTOP" token plummets 95%

Investors who suffered losses in the sharp collapse of Hunter Biden's related "LAPTOP" meme token market will have difficulty obtaining relief from U.S. securities regulators. In February 2025, the U.S. Securities and Exchange Commission (SEC), whose leadership was appointed by Donald Trump, issued an employee statement that made it clear that meme tokens were not classified as securities, making it impossible for traders to be protected under federal securities laws.

The collapse of LAPTOP tokens leads to heavy losses

According to blockchain analysis platform Arkham, after the launch of the "LAPTOP" token on Coinbase's Base blockchain, its price plunged 95% in the first 30 minutes of the transaction. In the early stages of the launch, just two minutes later, Arkham estimated the fully diluted valuation of the token as high as $144 billion. However, as trading volumes surged and prices collapsed, that figure plunged to $5 billion in half an hour.

Bubblemaps, a company that tracks high-risk token issuance, described the incident as a "massacre." Lookonchain's analysis showed that one wallet purchased $200,000 worth of tokens at about $218 each, but their value dropped to $3000 shortly afterwards. As of early Thursday morning, the LAPTOP token was trading at approximately $0.79, reflecting the scale of the huge losses investors faced shortly after the issuance.

Despite the rapid decline in the market, the LAPTOP project team denied that the crash was caused by a typical fraud scheme, but instead blamed it on aggressive automated trading robots and an initial lack of liquidity. The project team said on the Medium platform that it plans to inject 4 million tokens into the Aerodrome pool to support liquidity and expects to reduce the circulation supply by 1% through two forecast events that will burn a total of 10 million tokens in the first week.

Hunter Biden, the subject of this offering, made it clear in the release newsletter that he did not provide any guarantees of ownership, profit sharing or commitment to increase the value of the token, and clearly warned investors not to expect any support.

Regulatory Positions and Legal Warnings

The SEC's Corporate Finance Division confirmed in February 2025 that meme tokens do not meet the element of "deriving profits from the efforts of others" in the securities standards defined in the Howey test. The employee statement clarified: "Buyers and holders of memin are not protected by federal securities laws."

Legal analysis, including the Harvard and Colombia corporate governance blogs, emphasizes that even tokens marketed as memes may still be evaluated based on the economic reality of their functions. Despite the lack of federal securities protection, fraudulent activities involving meme tokens remain subject to enforcement jurisdiction by the Department of Justice (DOJ), the Commodity Futures Trading Commission (CFTC), and state regulators.

SEC Commissioner Caroline Crenshaw expressed dissent, arguing that the exemption for memin could become a regulatory loophole. However, the practical effect is that the SEC no longer serves as the main regulator for these tokens, including the troubled LAPTOP issuance.

This clarification on the regulation of meme tokens was issued after the beginning of Donald Trump's presidency and is consistent with high-profile meme tokens such as TRUMP and MELANIA. According to Better Markets, TRUMP tokens have caused losses of more than $2 billion to 800,000 wallets, while MELANIA tokens have dropped by 55% within minutes of their debut.

The interpretation that currently protects LAPTOP issuance also exempts previous federal securities registration requirements for meme tokens associated with the Trump family. The SEC's stance is a major shift for investors: Although the agency does not regulate meme tokens, other regulators can still step in if economic realities indicate additional risks or fraud.

Terminology: Howey Test

The Howey Test is a legal standard used in the United States to determine whether a transaction constitutes an investment contract subject to securities law. This test evaluates whether there is a financial investment in a joint enterprise and the expectation of profit from the efforts of others.

Token Name Maximum valuation Value after 30 minutes Reporting losses LAPTOP US$144 billion US$5 billion Decline 95%, case study shows a drop from US$200,000 to US$3000 TRUMP Not specified Not specified More than US$2 billion (involving 800,000 wallets)