A U.S. federal judge has ruled that the JENNER memecoin, launched by media personality and retired Olympian Caitlyn Jenner, does not qualify as a security under federal law. The decision, issued by U.S. District Judge Stanley Blumenfeld, Jr. in California, dismisses core claims in a class action lawsuit filed by investor Lee Greenfield.
Greenfield, a UK citizen, alleged he lost more than $40,000 investing in the $JENNER token. He purchased the token on both the Solana and Ethereum blockchains in May 2024. His complaint argued that Jenner used her celebrity status to "hype the token" and suggested her promotional efforts would cause its value to rise, constituting an unregistered securities offering. The lawsuit also named Jenner's manager, Sophia Hutchins, who passed away in July 2025.
Judge Blumenfeld's ruling hinged on the application of the Howey Test, the legal standard derived from a 1946 Supreme Court case used to define investment contracts. The test requires three elements: an investment of money, a common enterprise, and an expectation of profits derived from the efforts of others.
While the court acknowledged the investment of money, it found the complaint failed to plausibly allege the existence of a common enterprise. The judge stated, "Taken together, the allegations... do not plausibly allege that the investors agreed to split profits and losses or that they pooled their resources to create capital for investment in anything other than the coin itself." The order specifically cited alleged mechanisms like a transaction tax, buybacks, or marketing efforts as insufficient to establish horizontal commonality.
"Because Greenfield does not plausibly allege either horizontal or vertical commonality, he has not alleged the existence of a common enterprise," Judge Blumenfeld wrote. Consequently, the court did not need to evaluate the third prong of the Howey Test regarding profit expectations from Jenner's efforts.
The judge allowed non-federal claims to be pursued in state court, leaving the door open for further legal challenges under different frameworks. The ruling underscores the ongoing difficulty regulators face in applying traditional securities law to memecoins, which often lack formal investment structures or pooled profit schemes, placing them in a persistent regulatory gray area.
