U.S. SEC Commissioner Hester Peirce has stated that many memecoins in the market likely do not fall under the agency’s jurisdiction.
In an interview with Bloomberg, Peirce, who also leads the SEC’s newly established crypto task force, emphasized that the classification of memecoins depends on “facts and circumstances.”
“There are lots of people introducing memecoins right now, [and] facts and circumstances matter,” Peirce said. “But many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations.”
CFTC to Take Care of Memecoins?
She suggested that either the U.S. Congress or the Commodity Futures Trading Commission (CFTC) could step in to regulate memecoins, as they might not fit within the SEC’s existing framework.
Memecoins have gained significant traction in the crypto market, with projects often being driven by internet trends, celebrity endorsements, and social media hype.
Under previous SEC leadership, memecoins were often classified as securities under the Howey Test, as investors typically purchase these tokens expecting to make a profit. Some regulators have compared the memecoin frenzy to gambling due to its highly speculative nature.
However, Peirce’s recent remarks suggest that the SEC may be shifting its stance, potentially leaving memecoin regulation to other government agencies. This uncertainty raises questions about how memecoins will be treated under different regulatory administrations.
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SEC’s Crypto Task Force and Peirce’s Stance on Regulation
As head of the SEC’s crypto task force, Peirce is responsible for shaping clearer regulations surrounding cryptocurrencies, particularly in defining whether digital assets fall under security or commodity laws. S
he has been a vocal critic of the SEC’s current approach, arguing that excessive regulatory barriers hinder innovation in the crypto industry.
“I don’t describe myself as an advocate of the industry. I’m a freedom maximalist,” Peirce said, distancing herself from being seen as purely pro-crypto.
While she acknowledges the need for oversight, she has frequently criticized the SEC’s handling of digital assets, stating that the agency has made it difficult for crypto businesses to engage with regulators.
Peirce’s comments also come amid political shifts that could affect the regulatory landscape. Under the Biden administration, Bitcoin has been the only cryptocurrency universally recognized as a commodity.
However, with the approval of spot Ethereum ETFs, ETH has also been classified as a commodity. If the U.S. presidency changes hands in the upcoming election, crypto regulations could see drastic shifts, especially under a potential Trump administration.
The Current State of the Memecoin Market
The memecoin market has recently experienced a downturn. At the time of writing, the total market capitalization of memecoins is down from the last month.
While memecoins remain highly volatile, they continue to attract investors looking for quick gains, further fueling debates over whether they should be classified as securities or commodities.
As regulatory discussions continue, the fate of memecoins and their oversight remains uncertain. Whether they fall under SEC jurisdiction or are regulated by other agencies, the growing influence of memecoins in the crypto space ensures they will remain a focal point of regulatory discussions soon.
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