U.S. Securities and Exchange Commission Commisioner Hester Peirce said that many of the memecoins in the market likely do not fall under the agency’s jurisdiction during an interview with Bloomberg.
“There are lots of people introducing memecoins right now, [and] facts and circumstances matter,” said Peirce, who's also leading 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 mentioned that either the U.S. Congress or the Commodity Futures Trading Commission could possibly address the issue.
Peirce was appointed to lead the SEC’s newly established crypto task force last month. The commissioner previously said that its current priority is to classify what crypto tokens should be seen as “non-securities,” in an effort to provide clarity on the “crypto as securities” conundrum that troubled many players in the industry.
Peirce’s latest comment on memecoins likely being outside of the SEC’s jurisdiction contradicts pre-Trump SEC’s former chair Gary Gensler’s stance that a “vast majority” of cryptocurrencies are securities.
Under Gensler’s leadership, the SEC led enforcement actions against multiple major crypto players, such as Binance, Coinbase and Kraken, many of which complained that they weren’t given enough clarity to effectively comply with rules.
“We’ve just put roadblock after roadblock up against people who are trying to come in and talk to us,” Peirce told Bloomberg. “So all I’m asking is that we have an innovation policy that allows people to innovate, that allows people to try new things.”
Memecoins have existed in the crypto ecosystem for over a decade with tokens such as Dogecoin rising to prominence. On the back of easy-to-use Solana memecoin launchpad pump.fun, meme tokens have seen a renewed wave of mainstream interest last year, reportedly growing 500% in overall market capitalization to $120 billion in 2024. The memecoin craze has led U.S. President Donald Trump to launch his own meme token.
However, critics of memecoins pointed out that the tokens are largely unregulated despite being extremely volatile in market value. The memecoin market is also rife with fraudulent projects and pump-and-dump schemes that have led to investor losses.
Last month, one memecoin investor, represented by U.S. law firms Wolf Popper and Burwick, filed a proposed class action suit against pump.fun, alleging that the platform violated securities laws by offering highly volatile memecoins. The plaintiff compared pump.fun’s operations to that of a Ponzi scheme.
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