U.S. SEC Commissioner Hester Peirce on Memecoins

U.S. Securities and Exchange Commission Commissioner Hester Peirce stated during a Bloomberg interview that many memecoins likely do not fall under the SEC’s jurisdiction.

> “There are lots of people introducing memecoins right now, and facts and circumstances matter,” said Peirce, who leads the SEC’s crypto task force. “But many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations.”

Peirce suggested that the U.S. Congress or the Commodity Futures Trading Commission might address this issue.

Peirce, appointed to lead the SEC’s crypto task force last month, has indicated that the priority is to classify which crypto tokens should be considered “non-securities,” aiming to clarify the “crypto as securities” dilemma that has caused confusion in the industry.

Her comments on memecoins likely being outside the SEC’s jurisdiction contrast with the previous SEC chair Gary Gensler, who claimed that a “vast majority” of cryptocurrencies are securities. Under Gensler’s direction, the SEC took enforcement actions against significant crypto players such as Binance, Coinbase, and Kraken, which argued that they lacked clarity for compliance.

> “We’ve just put roadblock after roadblock up against people who are trying to come in and talk to us,” Peirce told Bloomberg, advocating for an innovation policy that fosters new ideas.

Memecoins have been present in the crypto landscape for over a decade, with tokens like Dogecoin gaining popularity. Recently, fueled by platforms like Solana’s launchpad pump.fun, the memecoin market saw a surge in interest, reportedly rising 500% in market capitalization to $120 billion in 2024. The memecoin trend even led to U.S. President Donald Trump launching his meme token.

However, critics note that memecoins remain largely unregulated despite extreme market volatility, which has led to fraudulent projects and pump-and-dump schemes, resulting in investor losses.

Last month, a memecoin investor, represented by U.S. law firms Wolf Popper and Burwick, filed a proposed class action suit against pump.fun, alleging violations of securities laws by offering highly volatile memecoins, comparing the operations to a Ponzi scheme.