The Legal and Ethical Quandary of Meme Coins Exploiting Names, Brands, and Intellectual Property
By Domizio Beconini
The cryptocurrency space has long been a breeding ground for innovation, speculation, and, increasingly, legal controversy—particularly with the rise of meme coins that incorporate real people’s names, established brands, or copyrighted material without authorization. These coins often emerge as tongue-in-cheek tributes to internet culture, leveraging the viral appeal of celebrities, corporations, or pop culture phenomena to attract investors. However, beneath the surface of their humorous veneer lies a complex web of intellectual property (IP) risks, potential fraud, and regulatory scrutiny. The very features that make these coins appealing—their association with well-known figures or brands—also make them legally precarious, raising questions about their long-term viability and the consequences for those who create or invest in them.
One of the most contentious aspects of meme coins is their unauthorized use of trademarks and personal likenesses. Consider, for example, the proliferation of celebrity-themed tokens such as ELON, which capitalize son ElonMusk’s fame, or ELON, which capitalize son Elon Musk’s fame, or TATE, which references the polarizing figure Andrew Tate. These coins often imply an endorsement or affiliation where none exists, misleading investors who might assume that the celebrity in question has sanctioned the project. Beyond individual names, some meme coins directly parody corporate brands—imagine a "PepsiCoin" or "TeslaToken" launched without any connection to the actual companies. Trademark law is explicitly designed to prevent such unauthorized commercial use, and corporations have a vested interest in aggressively protecting their intellectual property to avoid consumer confusion or brand dilution. The legal ramifications could range from cease-and-desist letters to full-blown lawsuits, particularly if a meme coin gains substantial market traction.
The issue becomes even more fraught when considering the right of publicity, a legal doctrine that prevents the unauthorized commercial use of a person’s name, image, or likeness. Public figures, from actors to athletes, have successfully sued companies for exploiting their identities without permission, and meme coins are no exception. If a token like "TaylorSwiftCoin" or "LeBronToken" were to emerge, the individuals involved could pursue legal action, arguing that the coin’s creators are profiting from their fame without consent. Even decentralized projects are not immune; while they may lack a central controlling entity, regulators and courts could still target developers, promoters, or exchanges that facilitate trading. The case of Kim Kardashian’s $1.26 million SEC fine for promoting EthereumMax without proper disclosure serves as a stark warning: celebrities and influencers who engage with such projects, even inadvertently, may face severe penalties.
Beyond individual and corporate IP concerns, meme coins tied to recognizable names or brands also run afoul of securities regulations. Many of these tokens are marketed as investment opportunities, with promoters hyping potential returns based on the perceived legitimacy lent by a celebrity or brand association. This could lead regulators like the U.S. Securities and Exchange Commission (SEC) to classify them as unregistered securities, subjecting them to enforcement actions. The infamous "Squid Game Token," which collapsed in a rug pull after exploiting the Netflix series’ popularity, demonstrates how quickly these projects can unravel when regulatory scrutiny or legal challenges arise. Even if a meme coin is created as a parody or joke, its financial nature makes it susceptible to serious legal consequences, particularly if investors suffer losses and seek recourse.
Given these risks, the future of meme coins that rely on unauthorized names, brands, or intellectual property is uncertain. While some may fly under the radar due to their small market caps or fleeting popularity, others could face aggressive legal pushback as regulators and IP holders become more vigilant. Projects that survive may be forced to rebrand, distancing themselves from the very associations that initially drew attention. Exchanges, wary of legal liability, might delist such tokens to avoid becoming entangled in lawsuits. For investors, the allure of quick gains must be weighed against the possibility of sudden collapse, regulatory intervention, or litigation that renders their holdings worthless. Ultimately, as the cryptocurrency industry matures, meme coins that flout intellectual property laws may find themselves on the wrong side of legal history—serving as cautionary tales rather than revolutionary financial instruments.
