The Chaotic Landscape of Meme Coins and SEC's Regulatory Approach
SEC Commissioner Hester Peirce suggests that meme coins like TRUMP may not fall under strict regulations, raising questions about future oversight.
Meme coins have gained immense popularity, but the question remains—are they considered securities? According to Hester Peirce, a commissioner of the SEC, they likely do not fall under strict regulation, which marks a shift from previous regulation protocols. She emphasized the uncertainty surrounding who might regulate these coins if the SEC does not take that responsibility, speculating that Congress or the CFTC might step in instead.
In an interview with Bloomberg, Peirce discussed the recent launch of TRUMP and MELANIA meme coins by Donald Trump and his wife. She indicated that these creations probably wouldn’t fall under SEC scrutiny.
“Many people are launching meme coins right now. However, most likely, they don’t fit the SEC’s current rules.”
“SEC has stated that meme coins are not securities”
“This is a complete turnaround from Gary Gensler, who aimed to categorize every cryptocurrency as a security.”
“Meme coins are collectibles, suggesting a positive outlook for the meme ecosystem and Solana.” - borovik (@3orovik) February 11, 2025
Hester Peirce’s Insights: If Not SEC, Who Will Oversee Meme Coins?
Peirce raised concerns about a lack of regulation potentially damaging the industry, warning that risky trading behaviors may be prevalent among inexperienced investors.
The shift in the SEC’s stance that meme coins are not securities contrasts sharply with Gensler’s previous rigid approach. Although considered bullish for meme coins, the market’s response has remained cautious, largely due to lingering regulatory uncertainties.
Additionally, meme coins are often tied to culture, humor, or celebrity, lacking the robust technical structure that underpins traditional cryptocurrencies like Bitcoin or Ethereum.
For instance, the TRUMP coin initially peaked at $73 but dramatically declined almost 80%, currently trading around $15.36, highlighting the volatility and speculative nature associated with meme coins.
As regulations evolve under incoming administrations, the future of meme coins remains in question, with varying opinions on their viability and potential risks without oversight.
