SEC ceases to regulate memecoins, including $TRUMP, provoking mixed reactions in the cryptocurrency industry.
Hester Pierce's Statements on Memecoins
Hester Pierce, the SEC Commissioner, confirmed that the Commission will not regulate memecoins, and investors should not expect any guidance on the $TRUMP token. She pointed out that in February the SEC stated that memecoins are not considered securities under U.S. federal law. Pierce compared the situation to the popularity of non-fungible tokens (NFTs) in 2021, when they also were not considered securities. 'I witnessed immense interest in memecoins, and it made sense for us to say: People, if you aren’t anticipating that there is SEC protection around these, you shouldn’t anticipate that,' Pierce noted.
Context and Consequences of the SEC's New Approach
Since President Trump took office in January, the SEC has been reassessing its strategy regarding the crypto industry as part of a more crypto-friendly approach to assets. This has stirred controversy, especially considering the heightened involvement of the president and his family in the cryptocurrency space. Many Democratic lawmakers have called this a conflict of interest, given that about 80% of the $TRUMP tokens are controlled by the Trump Organization and associated bodies.
$TRUMP Market and Its Volatility
While the token holds no intrinsic value, following its introduction in January it reached a market cap of $15 billion. However, in recent days the token has lost a significant portion of its value, highlighting the considerable volatility of memecoins.
The SEC's new statements regarding memecoins, including $TRUMP, raise questions about investor protection in this area. The market continues to demonstrate significant fluctuations, which requires caution from users.
