TLDR:

• A California federal court dismissed all Securities Act claims against Caitlyn Jenner over the $JENNER memecoin on April 16, 2026.
• The court ruled the $JENNER Ethereum token failed the Howey test due to lack of horizontal and vertical commonality among investors.
• Jenner’s 3% transaction tax gave her independent income regardless of investor losses, defeating vertical commonality claims in court.
• State law claims for fraud and quasi contract were dismissed without prejudice, leaving Greenfield the option to refile in California state court.

Caitlyn Jenner wins lawsuit after a California federal court dismissed all securities claims tied to the $JENNER cryptocurrency token.

Lead plaintiff Lee Greenfield had sued Jenner and her manager Sophia Hutchins, alleging the token was an unregistered security.

The U.S. District Court for the Central District of California ruled on April 16, 2026, that the Ethereum-based token did not meet the legal definition of a security. Greenfield had lost over $40,000 in the investment.

Judge Rules $JENNER Token Fails the Howey Test for Securities

The court applied the longstanding Howey test to determine whether the $JENNER token qualified as an investment contract.

That test requires proof of a common enterprise and an expectation of profits from others’ efforts. Greenfield could not satisfy either requirement, and the court dismissed the Securities Act claim with prejudice.

Greenfield argued that all token holders experienced identical percentage gains and losses, proving horizontal commonality.

The court disagreed, stating that parallel price movement does not substitute for pooling of investor funds. The SAC itself acknowledged that cryptocurrencies like the $JENNER token “lack utility other than as a store and transfer of value.”

Jenner and Hutchins made no development commitments behind the $JENNER token. Defendants described it plainly as “a memecoin on the Ethereum blockchain intended solely for entertainment purposes.” No funds were raised to build any product, software, or ecosystem connected to the token.

Jenner’s promotion included an AI-generated tweet image of her in a “JENNER ETH” T-shirt carrying an American flag.

A crowd member in the image held a sign reading, “LETS MAKE EVERYONE RICH!” Hutchins further promoted the project by touting Jenner’s ability to “bring attention and investors into the project,” citing her awards, fame, and powerful connections.

The court ruled that promotional activity alone could not replace the pooling structure that securities law requires.

Jenner’s Transaction Tax Seals Vertical Commonality Argument Against Plaintiff

Greenfield also pursued vertical commonality, pointing to Jenner’s holdings of over 20 million $JENNER tokens. He argued her financial stake linked her fortunes directly to those of investors. The court found otherwise, citing her 3% transaction tax as a decisive factor working in Jenner’s favor.

During a Twitter Spaces chat, Jenner said tax proceeds would fund Trump campaign donations, buybacks, and marketing.

When an X user pushed back, writing, “Use half of the taxes for buybacks. The community doesn’t like to just fund Trump. It would be fair to do half and half,” Jenner responded, “Not all taxes going for Trump.

The first distribution would be made when we hit 50m MC. And never said it would be ALL of them. Some have been used for buybacks, marketing, etc.” The court treated these statements as too vague to constitute meaningful managerial commitments.

Critically, the tax paid Jenner on every transaction whether investors profited or not. Under the Ninth Circuit’s ruling in Brodt v. Bache & Co., a promoter must share in investor losses for vertical commonality to exist.

The court noted that Jenner “kept hundreds of thousands of dollars in tax revenues for herself even as the investments of Greenfield and others became nearly worthless.” Because Jenner faced no downside risk tied to investor outcomes, the vertical commonality standard was not met.

With no viable federal claim remaining, the court declined jurisdiction over Greenfield’s state law claims for fraud and quasi contract. Those claims were dismissed without prejudice, allowing him to refile in California state court.

The court also denied any further attempt to amend the Securities Act claim, finding such an amendment would be futile. Jenner’s legal victory draws a clear legal boundary between celebrity-promoted memecoins and regulated securities.

Institutional investors are warming to digital assets, with improving sentiment and broader use cases emerging as key drivers of adoption, according to a new survey from Tokyo-based bank Nomura and its crypto unit Laser Digital.

The study, based on responses from more than 500 investment professionals in Japan, found that 31% of respondents now hold a positive outlook on crypto over the next year, up from 25% in 2024. Meanwhile, negative sentiment has declined, pointing to a gradual shift in perception as the asset class matures.

A central theme is diversification. Some 65% of respondents said they view crypto as a portfolio diversifier, while 79% of those considering exposure plan to invest within three years. Most expect relatively modest allocations — typically between 2% and 5% — suggesting institutions are still in the early stages of adoption.

That shift is being supported by a changing regulatory and policy backdrop. In Japan, policymakers have spent the past year refining crypto frameworks, including discussions around classification, taxation and investor protections. Globally, clearer rules in major markets — alongside the approval and expansion of crypto investment products such as exchange-traded funds (ETFs) and tokenized assets — have reduced some of the uncertainty that previously kept institutions on the sidelines.

As a result, interest is expanding beyond simple price exposure. More than 60% of respondents expressed interest in staking, lending, derivatives and tokenized assets, reflecting growing demand for yield-generating strategies and more sophisticated portfolio construction.

Stablecoins are also gaining traction, with 63% of respondents identifying potential use cases ranging from treasury management to cross-border payments and investment in tokenized securities.

Still, barriers remain. Concerns around volatility, counterparty risk and the lack of established valuation frameworks continue to weigh on adoption. Regulatory uncertainty, while improving, has not fully disappeared.

Even so, the survey suggests the conversation is shifting. Rather than debating whether to invest in crypto, institutions are increasingly focused on how to do so — a sign that digital assets are moving closer to becoming a standard component of institutional portfolios.

Peter Schiff, a well-known Bitcoin critic and gold advocate, has raised concerns about MicroStrategy’s ongoing Bitcoin acquisition strategy. 

The company has continued to expand its holdings through a mix of debt and equity issuance.

Schiff stated that MicroStrategy’s approach is becoming harder to sustain under current market conditions. He said “the company is shifting toward more expensive capital” while referencing recent financing changes linked to preferred shares.

He added that earlier funding methods, which included issuing shares at higher valuations, are becoming less effective in the present environment.

MicroStrategy has recently relied more on preferred share offerings with higher yield obligations. Schiff noted that the company is now issuing instruments with yields around 11.5 percent.

He said ”these obligations cannot be covered by software earnings alone” when describing the firm’s financial position. The company’s core software business has limited profit contribution compared to its Bitcoin exposure.

Schiff stated that funding future purchases may require additional issuance of preferred shares, discounted equity, or Bitcoin sales. He argued this could increase pressure on shareholders through dilution over time.

Claims of structural risk and market reaction

Schiff described the company’s financing approach as vulnerable if market conditions weaken. He said the structure depends heavily on continued access to capital markets.

Canadian billionaire Frank Giustra also commented on the strategy, calling it ”a giant ponzi that will unravel when the next financial crisis hits” according to remarks cited in reports. He suggested that macroeconomic stress could expose weaknesses in the model.

The comments reflect ongoing debate over corporate treasury strategies that rely on digital assets as a primary reserve.

Additionally, market research group BitMEX Research provided a different view on MicroStrategy’s approach. The firm stated that MicroStrategy is not under forced liquidation pressure and still has financial flexibility.

BitMEX Research said ”nobody is forcing MSTR to do this” and described the strategy as potentially beneficial under current conditions. It noted that the company can adjust financing terms, including coupon rates, instead of selling assets.

The discussion continues as MicroStrategy maintains one of the largest corporate Bitcoin holdings while using structured financial instruments to support its accumulation strategy.