Memecoins like Donald Trump’s Official Trump’s token does not fall under the SEC’s control. Commissioner Hester Peirce made this clear in a recent interview. She said most meme coins are outside the SEC’s current regulations.
Investors have lost about $2 billion on TRUMP in weeks. Peirce responded to concerns about meme coins increasing the SEC’s workload. She explained that their regulation is up to Congress or other agencies. She stated that many of these tokens do not fit within the SEC’s oversight. The New York Times reported heavy losses for TRUMP holders.
Memecoin investors face heavy losses
Data from Chainalysis showed 813,000 crypto wallets lost money after buying TRUMP. The coin launched on Jan. 17 and peaked at $72.60 on Jan. 19. Since then, it has dropped 80%. Its market cap shrank from $14.5 billion to $3 billion.
While investors suffered losses, the Trump Organization and partners made $100 million in trading fees. Meme coins are different from Bitcoin or Ethereum. They rely on community hype and celebrity backing instead of technology.Peirce emphasized that the SEC is not the right authority to regulate meme coins. She suggested that Congress or the Commodity Futures Trading Commission (CFTC) could take on that role.
She noted that many of these assets are not securities under current laws.Some experts agree with Peirce. ETF Store president Nate Geraci compared meme coins to collectibles. He said they do not function like traditional securities. Others see meme coins as part of a cycle.
Lessons from ICOs and NFTs
Macroeconomist Lyn Alden compared them to past crypto trends. She said meme coins resemble initial coin offerings (ICOs) and non-fungible tokens (NFTs). She pointed out that traditional finance critics have dismissed Bitcoin for similar reasons. Alden argued that some investors avoid Bitcoin because of these trends when they could benefit from holding it instead.
The SEC continues to focus on broader crypto regulation. Peirce leads the agency’s new crypto task force. Nevetheless, her stance suggests that meme coins may remain outside the SEC’s reach unless new laws emerge. The debate over meme coins and their place in finance is far from over.
