SEC’s Peirce Says Memecoins Like $TRUMP Fall Outside Regulatory Scope

SEC Commissioner Hester Peirce confirmed that most memecoins, including $TRUMP, do not meet the agency’s securities law criteria.

Peirce stated that the SEC will not offer protection to memecoin investors unless securities laws are clearly violated.

With a $120 billion surge in market cap, memecoins remain unregulated while attracting legal scrutiny and investor lawsuits.

U.S. SEC Commissioner Hester Peirce has stated that popular memecoins, including $TRUMP, may not fall within the agency’s jurisdiction. She clarified that investors should not expect protection from the SEC when investing in such digital assets.

Memecoins Not Under SEC Protection, Says Peirce

In a recent interview with Bloomberg, SEC Commissioner Hester Peirce addressed growing investor interest in memecoins such as $TRUMP. She clarified that these tokens often do not meet the legal standards that would require SEC oversight. Peirce stated, “You should not expect [SEC] protection,” making it clear that many memecoins are outside the agency's jurisdiction.

Peirce, who now leads the SEC's crypto task force, explained that the regulatory classification of each token depends on specific facts and circumstances. While the market for memecoins continues to expand, she noted that most of them do not fit the criteria defined under current securities laws. Peirce also confirmed that the SEC would not intervene unless the token violates existing laws related to securities.

Jurisdiction Questions Over Memecoins Like $TRUMP

Peirce stated that the classification of memecoins under SEC jurisdiction follows individual evaluations. In the words of Peirce, numerous tokens exist which do not meet security classification requirements based on current SEC guidelines. The stance of former SEC Chair Gary Gensler towards cryptocurrencies as securities has now been changed by the recent decision.

According to Peirce's analysis the Commodity Futures Trading Commission or Congress needs to develop regulatory control mechanisms for these tokens. Peirce has criticized the SEC in past remarks for its failure to support innovation and its use of excessively complicated processes that impede cryptocurrency developers and entrepreneurs.

Market Risks Grow as Memecoins Surge

Memecoins have seen rapid growth, particularly in 2024. Platforms like Solana’s pump.fun contributed to a 500% increase in market capitalization, with the total value of meme tokens reaching $120 billion. Despite this, regulatory oversight remains minimal.

Investor losses have become common due to scams and manipulation within the memecoin market. One such case involved a class action lawsuit filed against pump.fun, claiming its operation resembled a Ponzi scheme and violated securities laws. The lawsuit is being handled by Wolf Popper and Burwick law firms.

Peirce’s recent remarks reinforce the SEC’s current stance on memecoins like $TRUMP. With no clear protection in place, investors face higher risk when entering these markets.

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