Most Memecoins Do Not Fall Under SEC Ambit: Commissioner Hester Peirce

SEC Commissioner Hester Peirce asserts that most memecoins do not fit into existing securities regulations.

Over the past year, memecoins have been the dominant driver of crypto activity as market participants chase the elusive dream of overnight wealth.

From the outside looking in, however, many have raised concerns about the volatile nature of these assets and the amount of money investors are losing in this high-speed crypto casino. Surely, they have to be breaking some regulations?

According to one SEC commissioner, however, if they are, it is likely not existing securities regulations.

Not an SEC Concern?

SEC Commissioner Hester Peirce has asserted that most memecoins do not fit into existing securities regulations and, as such, do not fall under the agency’s purview.

The regulator disclosed this when asked during a Bloomberg interview on Tuesday, February 11, whether memecoins launched by President Donald Trump and First Lady Melania Trump posed any hurdles to the agency.

“Many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations, and so again, if that’s something that Congress wants to address, they can do that. Maybe that’s something the CFTC wants to address, but many of those, I think, probably, are not within our jurisdiction,” she contended.

The statements from Peirce, who some have come to consider a crypto advocate within the SEC, is yet another instance highlighting the agency’s ongoing shift from the doctrines professed by former Chair Gary Gensler. He had asserted that most cryptocurrencies fell under the SEC’s jurisdiction.

Peirce has recently been appointed head of the SEC’s first-ever crypto task force by Acting Chair Mark Uyeda. 

The task force has been established to get the agency out of the perceived crypto regulatory quagmire left by the Gensler administration, which was accused of offering no clarity of how crypto assets fit into existing regulations while concurrently pursuing a barrage of enforcement actions—a strategy many dubbed regulation by enforcement.

Last week, Peirce noted that one of the task force’s primary goals was to clearly define what constitutes a crypto asset security to offer the industry clarity.

Despite Peirce’s stance on memecoins, the commissioner, during her interview with Bloomberg, reiterated her warning that the current administration’s push towards a more policy-driven approach did not in any way mean a “free-for-all.”