Introduction
Meme coins, born from internet culture and propelled by social media hype, have carved a unique niche in the digital asset landscape. These tokens, often launched as parodies, gain traction through viral marketing, community support, endorsements from celebrities and influencers, speculative trading, and scarcity mechanisms.
With meme coins becoming a significant part of the cryptocurrency landscape, in this article, I explore the regulatory treatment of meme coins in Singapore and highlight potential risk disclosures to be given by digital payment token (DPT) service providers considering their involvement with these assets.
The Universe of Meme Coins
Unlike mainstream cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), meme coins typically lack a well-defined use case or technological innovation. Despite their often humorous origins, some meme coins, like Dogecoin (DOGE) and Shiba Inu (SHIB), have achieved significant popularity.
Some meme coins are designed to grow a community. For example, the meme coin $BROT was created by a team dedicated to making virtual content creation effortless and accessible. The team created Blockrot, a 24/7 AI—driven interactive Minecraft live-streamer, alongside its meme coin. The team states that: “Unlike traditional memecoins, which often rely on speculation and hype, $BROT is backed by real technology, a real team of artists and developers and a clear vision for the future.”1
More recently, the success of politically themed coins like $TRUMP and $MELANIA illustrates how public figures can influence a meme coin’s value. However, their volatility and speculative nature demand a closer look at regulatory frameworks.
Where Do Meme Coins Fit Within the Global Financial Markets?
The global financial market, comprising stocks, bonds, real estate, and other traditional assets, is valued at hundreds of trillions of dollars, forming the backbone of global investment. In comparison, the crypto market, at roughly $1–2 trillion, accounts for just 0.5% to 1% of the total market size. Within this already niche space, meme coins constitute an even smaller fraction—roughly 2% to 5% of the total crypto market cap.
Despite their small share, meme coins have a disproportionately large impact on market sentiment, fuelled by social media virality and speculative trading. Their rapid rise and fall present unique challenges for regulators and market participants, requiring careful consideration of their legal and compliance frameworks.
Singapore’s Regulatory Approach to Meme Coins
Singapore stands out as a progressive and crypto-friendly jurisdiction. In Singapore, meme coins will often be classified as DPTs under the Payment Services Act 2019 (the PS Act). Many meme coins, including $TRUMP and DOGE, are available for trading by licensed entities in Singapore. However, no additional regulatory requirements are specifically prescribed for meme coins, despite the nature of the risks associated with them.
Key aspects of Singapore’s regulatory approach include:
- No Specific Definition for Meme Coins – Meme coins are assessed under the broader DPT category without a distinct classification.
- Licensing Requirements – Entities providing payment services with respect to meme coins would typically require a license under the PS Act.
- Evolving Regulation – Some consumer protection guidelines in Singapore (such as a guideline for retail investors to pass a risk awareness assessment) take effect in June of 2025.2 In addition, we believe new market integrity guidance may be published in 2025.3
Key Considerations for DPT Service Providers Listing Meme Coins
For DPT service providers, distinguishing between the risk profiles of meme coins versus stablecoins and traditional cryptocurrencies is crucial when listing new meme coins, and investors should be provided appropriate warnings commensurate to the risks. For illustration purposes, we would suggest the following risk factor disclosures:
Enhanced Volatility Warning
Meme coins may experience significantly higher volatility compared to other digital payment tokens. Their value can fluctuate dramatically based on social media trends, celebrity endorsements, and market sentiment, potentially leading to substantial or complete loss of investment within short periods.
Fundamental Value Risk
Meme coins generally lack fundamental technological innovation or defined use cases. Their value is primarily driven by community sentiment and speculative trading rather than underlying utility or technological advancement. Investors should understand that these assets may have limited long-term sustainability.
Market Manipulation Risk
Due to their social media-driven nature and typically smaller market capitalization, meme coins are particularly susceptible to market manipulation through coordinated trading activities, influencer promotions, and pump-and-dump schemes.
Conclusion: The Future of Meme Coin Regulation in Singapore
Meme coins have evolved from internet jokes to become significant market instruments requiring careful regulatory consideration. While meme coins can be highly volatile, their impact on investor behavior and market sentiment extends beyond their modest market share.
As regulatory frameworks continue to develop globally, several key factors will likely shape the future of meme coin trading and oversight:
- The need for clear risk assessment frameworks
- Enhanced investor education initiatives
- Balanced compliance measures that protect investors while allowing innovation
- Regular updates to risk disclosures as markets evolve
Singapore’s approach through the DPT framework represents one of several regulatory models emerging globally. As the meme coin landscape continues to mature, different jurisdictions will likely develop varied approaches to regulate these unique digital assets, balancing innovation with consumer protection.
The success of any regulatory framework will ultimately depend on its ability to address the distinct challenges posed by meme coins while maintaining market integrity and protecting investor interests.
📩 Need expert guidance? Our team is available to help DPT service providers navigate the risks and regulatory complexities associated with meme coins and digital assets.
For further information, contact:
Harminder Gill: Partner | Harminder.gill@hmstrategy.com
Chris Holland: Partner | chris.holland@hmstrategy.com
Disclaimer: The material in this post represents general information only and should not be relied upon as legal advice. Holland & Marie Pte. Ltd. is not a law firm and may not act as an advocate or solicitor for purposes of the Singapore Legal Profession Act.
1 See “Blockrot – A new Player Has Entered the Game”.
2 See Paragraph 1.2.1 of the Guidelines on Provision of Protection Safeguards by Digital Payment Token Service Providers.
3 See the Consultation Paper on Proposed Measures on Market Integrity in Digital Payment Token Services.
