The US Securities and Exchange Commission said on Thursday it will not classify most “meme coins” as securities under federal law, marking a significant shift in its approach to regulating the cryptocurrency industry.

In a staff statement, the SEC’s Division of Corporation Finance said meme coins, which are inspired by internet memes and trends, are primarily purchased for entertainment and social purposes, with their value driven by market demand rather than the efforts of a central enterprise.

The move departs from the SEC’s previous stance under former chair Gary Gensler, who had pushed for meme coins to be treated as securities. The change comes under new SEC Chair Mark Uyeda, appointed by President Donald Trump in January.

“It’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner,” Uyeda said in a statement.

The SEC’s announcement coincides with other developments in the crypto space, including the launch of Trump’s own meme coin, $TRUMP, which has since lost billions in value, and the dismissal of the SEC’s lawsuit against Coinbase, the largest US crypto exchange.

While the guidance provides clarity on the SEC’s view of meme coins, it notes that the stance may not apply to offerings that deviate from outlined characteristics or attempt to evade securities laws. The SEC also warned that fraudulent meme coin activities may still face enforcement from other agencies.

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