Peirce says SEC not in the jurisdiction of Memecoins
SEC Commissioner Hester Peirce clarified that memecoins, such as those branded as TRUMP and MELANIA, were not considered regulatory under the current framework of the U.S. Securities and Exchange Commission (SEC). On February 11, in an interview with Bloomberg, Peirce voiced these digital assets were not under SEC jurisdiction, saying regulatory control would belong to either Congress or elsewhere, perhaps to the Commodity Futures Trading Commission (CFTC).
“Many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations,” she said.
Investors in TRUMP Memecoin Lose $2 Billion
Peirce’s statements came while The New York Times reported on massive losses for TRUMP memecoin investors. According to a report by Chainalysis, a blockchain analysis firm, at least 813,000 wallets suffered total losses of $2 billion after purchasing TRUMP.
This token debuted on January 17, 2023, and briefly rose to $72.6 on January 19. It has fallen almost 80% since then, with its market cap going from $14.5 billion to $3 billion, CoinGecko reports.
Despite this massive loss, reports say that the Trump Organization and its partners pocketed $100 million in fees on tokens’ transactions.
Memecoins: Just Speculative Collectibles or True Crypto Assets?
Some experts argue that memecoins should not really be considered securities but more like speculative collectibles. Macro investor Lyn Alden pointed out the current memecoin phenomena are mirroring events from previous crypto iterations, from ICOs to NFTs.
“I’ve watched this space since 2017; myself I see a lot of the same patterns,” Alden wrote in X.
Another voice echoing this sentiment is Nate Geraci, president of ETF Store: “Memecoins are more akin to collectibles.”
Whereas Bitcoin or Ethereum have a fundamentally sound use case, memecoins sort of wax and wane on Internet fads, celebrity endorsements, and speculation.
While Peirce asserted that other governmental bodies might step in as needed, there will be no SEC regulation of memecoins.
“If that’s something that Congress wants to address, they can do that. Maybe that’s something the CFTC wants to address,” she concluded.
