- SEC commissioner Hester Peirce weighs in memecoin regulation.
- Many argue that memecoins are not securities, and therefore don’t fall under the SEC’s regulatory remit.
- Peirce also called for SEC policy that allows people to innovate.
Should the US Securities and Exchange Commission be responsible for regulating memecoins?
Probably not, says Hester Peirce.
In a Bloomberg interview on Tuesday, the SEC commissioner weighed in on memecoins, which have long existed in a regulatory grey area, despite ballooning into a $75 billion market.
“Facts and circumstances matter,” Peirce said. “Many of the memecoins that are out there probably do not have a home in the SEC, under our current set of regulations.”
Many argue that memecoins are not securities, and therefore don’t fall under the SEC’s regulatory remit.
That doesn’t necessarily mean memecoins won’t eventually be regulated, just probably not by the SEC.
“Maybe that’s something the Commodity Futures Trading Commission wants to address,” Peirce said, while suggesting that congress could engage with the issue of memecoin regulation if it wanted to.
Memecoin madness
Peirce’s comments come amid controversy over last month’s launch of official memecoins created by President Donald Trump and his wife Melania. Some were incredulous that the president would wade into a market teeming with wild price swings, joke coins, and scammers.
The TRUMP token skyrocketed to a $15 billion market value before collapsing 79%, leaving investors in the lurch. Melania’s token fared worse, losing 89% of its value.
Memecoins have soared in popularity over the past year and a half. Such tokens, usually based on a popular figure or online joke, often explicitly detach themselves from any promise of gaining value.
The Trump memecoin, for example, states on its website that it is intended to function as an expression of support for the president and not an investment.
Even so, risk-tolerant investors routinely pile into memecoins like TRUMP due to their extreme volatility and the potential for buyers to make life-changing money quickly.
A new approach
Peirce, who last month was picked to head a new crypto task force charged with creating bespoke regulations for digital assets, has quickly become one of the most influential voices in US crypto regulation.
Earlier this month, she set the tone for crypto regulation under the Trump administration by saying the SEC won’t bail out rash investors.
“If people want to buy a token or product that lacks a clear long-term value proposition, they should feel free to but should not be surprised if someday the price drops,” Peirce said in a policy statement published February 4.
“People must decide for themselves, not look to Mama Government to tell them what to do or not to do, nor to bail them out when they do something that turns out badly.”
In the same Bloomberg interview, Peirce also commented on the SEC’s previous approach to regulating crypto, which she has long criticised.
“We’ve just put roadblock after roadblock up against people who are just trying to come in and talk to us as we have asked them to do,” she said, referring to the former SEC Chair Gary Gensler’s call for crypto firms to engage with the regulator.
Despite Gensler repeatedly requesting crypto firms to engage with the SEC, many, such as US exchange Coinbase, say that the regulator had been reluctant to work with them.
“All I’m asking is that we have an innovation policy that allows people to innovate and allows people to try new things,” she said.
Crypto market movers
- Bitcoin is down 1.6% over the past 24 hours and is trading at $96,213.
- Ethereum fell 2.1% over the same period to $2,630.
What we’re reading
- Kraken says its girding for more rivals and deals amid crypto trading frenzy ― DL News
- Ethereum Is Lagging. Here’s How It Could Finally Shake Off Rival Solana ― Unchained
- New ETF approvals incoming? ― Milk Road
- Traders pile $130m into short bets on Ethereum. Here’s where they see the price ― DL News
- Lido Goes Modular With Vault-Based ‘V3’ Upgrade ― CoinDesk
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
