The Securities and Exchange Commission (SEC) Commissioner Hester Peirce recently stated that the $TRUMP token falls outside the agency’s regulatory jurisdiction.
She explained that since the SEC no longer regulates meme coins, investors should not expect any official guidance on this cryptocurrency. Earlier in February, the SEC clarified that most meme coins are not classified as securities under U.S. federal law, thus removing them from its oversight.
The $TRUMP token, largely controlled by the Trump Organization and associated entities, experienced a sharp rise and fall shortly after its launch in January. This cryptocurrency became the subject of investigation by Democratic legislators precisely because of fears over possible conflicts of interest.
The token reached a market value of around $15 billion due to public backing from President Donald Trump. However, it lost almost all its value within days subsequently, with however still allows the project’s founders to earn commissions through trading activities.
Hester Peirce made a comparison with the surge of nonfungible tokens (NFTs) in 2021, which too was outside the SEC’s regulatory purview. She pointed out that although most digital assets fluctuate in value due to market actions, the SEC’s role does not include protecting investors in those areas.
SEC eases crypto rules under Trump
According to Peirce, individuals should realize that they have limited protections when dealing with meme coins and must invest prudently.
Since President Trump took office, the SEC has relaxed its enforcement against cryptocurrencies and embraced a more industry-friendly approach.
This has sparked heated debate, especially at a time when the Trump family is increasing its involvement with cryptocurrency assets, which some Democratic lawmakers, including Senator Richard Blumenthal, now consider to be a potential conflict of interest.
Meanwhile, the SEC recently dropped its lawsuit against Binance and its founder Changpeng Zhao, terminating one of the most aggressive enforcement actions by the former leadership of the SEC.
Zhao’s net worth is now estimated at over $67 billion after he pleaded guilty to federal money-laundering charges in late 2023. According to Commissioner Peirce, this is simply a reflection of the SEC’s current approach: to first establish clear rules before beginning enforcement.
