Memecoins Likely Fall Outside SEC Jurisdiction: Hester Peirce

Highlights:

• Peirce says many memecoins probably do not fall under the agency’s regulation.
• SEC task force is working to classify tokens as non-securities.
• Peirce says the SEC is reviewing crypto platform classifications and registration requirements.

During a live interview on Bloomberg’s Crypto TV segment on Tuesday, U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce was asked whether President Donald Trump and his wife’s official memecoins, TRUMP and MELANIA, would fall under the watchdog’s jurisdiction. The new head of the SEC’s crypto task force stated that such assets likely do not fall under its jurisdiction. Trump launched his Solana-based meme token before his January 20 inauguration. Melania Trump introduced her own coin shortly after.

Peirce said:

“There are lots of people introducing meme coins right now. But many of the meme coins out there probably do not have a home in the SEC under our current set of regulations.”

She stated that the issue could potentially be handled by either the U.S. Congress or the Commodity Futures Trading Commission. Last month, she was appointed to lead the SEC’s newly formed crypto task force. She previously stated that the task force’s main focus is determining which crypto tokens qualify as “non-securities” to bring clarity to the long-debated classification of cryptocurrencies in the industry.

JUST IN: 🇺🇸 Crypto Task Force Head Hester Peirce says memecoins do not fall under the SEC's jurisdiction 👀 pic.twitter.com/jI9ASaEugy

— BlockNews (@blocknewsdotcom) February 11, 2025

Memecoins Surge in Popularity But Face Regulatory Concerns

Memecoins have been part of the crypto space for over a decade, with Dogecoin becoming one of the most well-known examples. The rise of user-friendly platforms like Solana’s pump.fun, simplifying memecoin creation, has fueled renewed interest in these assets. Last year, their total market capitalization reportedly surged by 500%, reaching $120 billion. This growing trend even prompted Trump to introduce his own memecoin.

However, critics argue that memecoins remain largely unregulated despite their extreme market volatility. They also highlight the prevalence of scams and pump-and-dump schemes that have caused significant investor losses.

Peirce Calls for Policy Shift

Peirce recognized that the SEC, under previous leadership, focused largely on enforcement actions to shape regulatory policy. She intends to shift away from this approach.

She said:

“We have been using enforcement cases to set regulatory policy. We’re trying to shift that. So we actually set policy and then we bring enforcement cases as needed.”

Peirce emphasized that the SEC must carefully reassess existing cases and address them individually. She acknowledged that crypto companies have faced challenges in registering with the SEC, as both the agency and the Federal Reserve have made it difficult for banks to engage with the industry.

According to Peirce, the SEC is now working to resolve this issue. She noted that regulatory barriers have hindered companies from registering and emphasized the importance of an innovation policy that fosters new ideas and experimentation.

SEC Reviews Crypto Platform Classification and ETF Applications

The SEC is currently reviewing how crypto trading platforms should be classified. Peirce said the first step is determining whether a platform deals in securities. If it does, registration will be required; if not, the SEC will step back. A strong advocate for Bitcoin ETFs, Peirce also confirmed that the agency is actively reviewing new ETF applications, including those for XRP, Solana, Litecoin, and Dogecoin.

The SEC is currently downsizing. The agency extended a deferred resignation program, allowing staff to leave voluntarily. Peirce did not disclose how many accepted the offer but confirmed the restructuring. She simply stated, “We’re always thinking about how we can do our jobs more efficiently and effectively.”