SEC Commissioner Hester Peirce stated that many memecoins might not fall under the agency's jurisdiction due to current regulations, raising broader questions about the classification and regulation of digital assets.
Memecoins Jurisdiction
In an interview with Bloomberg, Hester Peirce explained that determining whether a memecoin falls under SEC’s jurisdiction depends on specific facts and circumstances. Under existing regulations, many of these tokens likely do not qualify as securities. Peirce stressed that the U.S. Congress or the Commodity Futures Trading Commission could provide clarity on the issue.
Rising Popularity of Memecoins
Memecoins have been part of the crypto ecosystem for over a decade, but their popularity has surged in the past year. The overall market capitalization of memecoins increased by 500%, reaching $120 billion in 2024. High-profile figures, including former President Donald Trump, have been active in this market.
Criticism of SEC Regulation
Peirce also criticized the current SEC approach to crypto regulation, stating that the agency imposes unnecessary roadblocks for industry players. “We’ve just put roadblock after roadblock up against people who are trying to come in and talk to us,” she told Bloomberg.
The creation of a special crypto task force led by Hester Peirce will help determine which tokens should be considered “non-securities.” This may clarify a long-standing debate about crypto regulation and provide clarity for industry participants.
