In a significant legal decision, a California judge has determined that the $JENNER memecoin, introduced by former Olympic gold medalist and television personality Caitlyn Jenner, does not meet the criteria to be classified as a security. This conclusion comes after a class action lawsuit filed in late 2024 by Lee Greenfield, who reported losses surpassing $40,000 from his investment in the token.
What Allegations Faced Caitlyn Jenner?
Greenfield, who acquired the $JENNER token through the Solana and Ethereum blockchains in May 2024, alleged that Jenner leveraged her fame to promote the token. It led investors to anticipate substantial profits. Jenner’s social media posts featured AI-crafted images displaying “JENNER ETH” shirts, accompanied by American flags, and conveyed hopeful messages such as “Let’s make everyone rich!”
Jenner is a household name in the United States, known for her athletic achievements and reality show appearances. By venturing into the cryptocurrency space with her token initiative, she attracted significant attention from both crypto enthusiasts and the general public.
How Did Key Legal Arguments Shape the Outcome?
The lawsuit also involved Jenner’s manager, Sophia Hutchins, who passed away in July 2025. The defense argued against the classification of the $JENNER token as a security and stated that Hutchins could not be deemed a vendor in this context.
Judge Stanley Blumenfeld, Jr. invoked the pivotal 1946 Howey case from the US Supreme Court to determine if the investment qualified as a security. This test examines if investments are combined in a unified endeavor, with profits deriving from the efforts of others. Despite Greenfield’s investment, the judge concluded it didn’t involve a common enterprise, crucial for the security classification.
“Considering the claims as a whole, it is not reasonable to assert that investors pooled funds to share profits or losses, raise capital, or finance any project beyond the coin itself. Thus, there is no common enterprise on the basis of horizontal commonality,” Judge Blumenfeld articulated in his decision.
Judge Blumenfeld further stated there was an absence of both horizontal and vertical commonality among the investors, failing to meet the “common enterprise” component of the Howey test. Consequently, he did not address whether profit expectations hinged on Jenner’s activities.
What Lies Ahead for State-Level Proceedings?
Following the dismissal of the federal securities claim, the ruling clarified that any unresolved state-level charges could proceed in California’s jurisdiction. Greenfield retains the option to pursue his allegations locally under state laws.
“Given the absence of a common enterprise, further review is unnecessary,” the judge explained in his ruling on the matter.
This court decision contributes to the diverse perspectives within American judiciary systems regarding how some cryptocurrencies, like meme tokens, should be interpreted under securities law. The California ruling might inform future legal proceedings concerning similar digital assets.
