Investors seeking regulatory intervention after the collapse of Hunter Biden’s LAPTOP meme token may have to look beyond the U.S. Securities and Exchange Commission (SEC). In a February 2025 staff statement, the SEC’s Division of Corporation Finance said meme tokens generally are not securities and that people who lose money trading them are not protected by federal securities laws.

According to blockchain analytics firm Arkham, LAPTOP fell 95% within 30 minutes of its Wednesday launch on the Base blockchain. The token’s collapse has been described as a “bloodbath” by analytics firm Bubblemaps.

The SEC statement applied to meme tokens launched by Donald Trump and Melania Trump, but its interpretation may also limit the agency’s ability to pursue action involving Hunter Biden’s token. The comparison has drawn attention because the physical laptop associated with Hunter Biden became a major political issue for Joe Biden and was connected to Hunter Biden’s federal firearm conviction. The tokenized version of the same object is now being assessed under the SEC’s current interpretation of federal securities law.

Hunter Biden’s LAPTOP promotion

Hunter Biden did not promise equity, ownership, or profits as part of his promotion of LAPTOP. In a Medium launch update, he also stated that buyers should not expect him or anyone else to increase the token’s value: “You should not expect us or anyone else to make this token more valuable for you.”

The token’s structure also did not precisely match a typical rug-pull setup. Nevertheless, LAPTOP’s fully diluted valuation fell sharply, from an estimated $144 billion two minutes after launch to $5 billion 30 minutes later, according to Arkham.

Lookonchain identified one buyer who reportedly turned a $200,000 position into $3,000 after entering near $218 per token. LAPTOP was trading at approximately $0.79 at the time of Cryptopolitan’s early Thursday report, published on Cryptopolitan.

The LAPTOP team attributed the volatile launch to “predatory sniper bots” and starting liquidity that could not absorb demand, placing responsibility on the market maker. The team said on Medium that it would deploy four million tokens to seed pools on Aerodrome. It also said circulating supply could decline by about 1% during the first week if two prediction events resolve “Yes,” triggering the burning of 10 million tokens.

Which regulators can act against memecoins?

In its February 2025 statement, the SEC’s Division of Corporation Finance said meme tokens generally do not satisfy the Howey test’s requirement that profits come from the efforts of others. The statement said: “Neither meme coin purchasers nor holders are protected by the federal securities laws.”

Analyses from law firms published by the Harvard corporate-governance blog and Columbia Law School’s Blue Sky Blog identified two caveats. A token presented as a meme coin but functioning as a security would still be evaluated according to its economic reality. In addition, allegations of fraud could remain subject to action by the Department of Justice, the Commodity Futures Trading Commission, and state regulators.

SEC Commissioner Caroline Crenshaw dissented, warning that the carve-out could operate as a loophole. The practical effect, however, is that the SEC may not be the primary regulator for LAPTOP.

The staff statement was issued after Trump took office and new SEC leadership was installed, following the launch of Trump’s own token. According to Better Markets, the TRUMP token followed a similar trajectory to LAPTOP, leaving more than 800,000 wallets with losses exceeding $2 billion. Cryptopolitan also reported that TRUMP fell about 55% within minutes of the MELANIA token’s launch, as described in its coverage of the Hunter Biden laptop token.

Under the SEC’s current interpretation, the same position that allowed the TRUMP and MELANIA tokens to trade without securities registration may also limit the agency’s ability to pursue action against Hunter Biden’s LAPTOP token.