I found this decision that’s been making the rounds quite interesting. A judge in California ruled that JENNER, that meme coin associated with Caitlyn Jenner, is not a security. Basically, the court dismissed the securities fraud claims that had been filed.

The important detail here is that Judge Stanley Blumenfeld Jr. based his decision on the Howey Test. This test is the standard for determining whether something is an investment contract or not. According to his analysis, the meme coin doesn’t meet the criteria because there’s no common enterprise involved, nor pooling of resources or profit sharing among investors.

To provide some context, there was a guy named Lee Greenfield who filed a class action and reported losses of over $40,000 invested in the Solana and Ethereum versions of the asset. But the court concluded that these losses were due to market volatility, not structural fraud.

What I find relevant is that this sets an interesting precedent for celebrity-linked meme coins. The decision essentially says that just because a meme coin is volatile and people lose money, that doesn’t automatically make it a security. There has to be a corporate structure behind it.

This protects meme coin creators from lawsuits related to price fluctuations, as long as the project isn’t structured as a typical company. The state-level claims against Jenner will still be handled separately, but the federal securities issue was basically dismissed. It’s a sign of how the legal system is starting to differentiate meme coins from traditional structured investments.