SEC Commissioner Hester Peirce Discusses Memecoins and Regulatory Jurisdiction
The U.S. Securities and Exchange Commission (SEC) may not hold jurisdiction over a significant number of the memecoins that have recently inundated the cryptocurrency market, according to SEC Commissioner Hester Peirce. In a recent interview with Bloomberg, Peirce stated, “We always have to look at the facts and circumstances, but many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations.”
She further emphasized, “If that’s something Congress wants to address, they can do that. Maybe that’s something that the Commodity Futures Trading Commission (CFTC) wants to address. But many of those, I think, are probably not within our jurisdiction.”
Unlike established cryptocurrencies such as Bitcoin and Ether, memecoins do not possess intrinsic value. For years, numerous stakeholders within the industry have resisted the notion of regulating these tokens as securities, arguing instead that they are more akin to digital collectibles, similar to beanie babies or baseball cards, rather than formal investment contracts.
Peirce’s more relaxed approach to memecoins represents a significant departure from the SEC’s previous regulatory stance under former Chairman Gary Gensler. Gensler had often proclaimed that virtually all crypto tokens, with the exception of Bitcoin, qualified as securities. However, just one day after Gensler’s resignation, Acting Chair Mark Uyeda declared the establishment of a new Crypto Task Force, led by Peirce. This initiative aims to provide clarity in regulatory frameworks for the crypto sector and signifies a potential move away from the “regulation by enforcement” strategy that characterized Gensler’s tenure.
In the week prior, Peirce outlined the primary objectives for the Crypto Task Force, including clarifying the longstanding ambiguity surrounding the classification of crypto assets as securities versus commodities and creating a more accessible pathway for registration by adjusting the SEC’s existing frameworks. In her statement, Peirce also shared her perspective on memecoins, remarking:
“If people want to buy a token or product that lacks a clear long-term value proposition, they should feel free but should not be surprised someday if the price drops. In this country, people generally have the right to make decisions for themselves, but the counterpart to that wonderful American liberty is the equally wonderful American expectation that individuals must decide for themselves, not look to ‘Mama Government’ to tell them what to do or not do, nor to bail them out when they make choices that ultimately lead to unfavorable outcomes.”
