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SEC’s Peirce Says Most Memecoins Aren’t Securities: Was Gensler Wrong All Along?

Published by
Vignesh S G

SEC Commissioner hester peirce has stirred the crypto world with a bold statement – most memecoins don’t fall under SEC jurisdiction. This view stands in direct contrast to former SEC Chair Gary Gensler’s strict stance on crypto regulation. But why does this matter? Because Peirce leads the newly appointed crypto task force set up by President Donald Trump to decide which cryptocurrencies count as securities and which don’t.

With billions of dollars in play, this debate is about the future of crypto itself. Let’s understand this.

SEC’s Position on Memecoin Regulation

Peirce’s comments suggest a shift in the SEC’s approach. Unlike Gensler, the current SEC leadership does not seem to believe it has the legal authority to regulate most memecoins.

Reports indicate that Peirce considers Congress and the Commodity Futures Trading Commission (CFTC) to be better suited to oversee memecoins instead of the SEC.

During Gary Gensler’s time as SEC chairman, the agency took a strict stance on cryptocurrencies, arguing that many digital assets qualify as securities. This led to several legal battles against major crypto exchanges, including Binance, Coinbase, and Kraken.

The Size of the Memecoin Market

Despite regulatory uncertainty, memecoins remain a major part of the crypto sector. The total memecoin market cap is $75.57 billion, making up 2.31% of the total crypto market cap of $3.27 trillion

Top five memecoins by market cap:

  • Dogecoin (DOGE): $37.39 billion
  • Shiba Inu (SHIB): $9.24 billion
  • Pepe (PEPE): $4.02 billion
  • Official Trump (TRUMP): $3.08 billion
  • Bonk (BONK): $1.35 billion

In the last one year, Dogecoin has surged by 214%; Shiba Inu by 68%; Pepe by 850%; and Bonk by 41.4%. 

However, in the last seven days, prices have fallen. DOGE has dropped by 4.5%; SHIB by 2%; PEPE by 6.5%; TRUMP by 14.5%; and BONK by 6%.   

Memecoin Regulation: Concerns and Challenges

While memecoins continue to grow in popularity, critics warn about extreme volatility and a lack of regulation. Many believe the market is vulnerable to fraudulent projects and pump-and-dump schemes.

Recently, a memecoin investor filed a lawsuit against Pump.Fun, a Solana-based platform that allows users to create and trade memecoins. Backed by US law firms Wolf Popper and Burwick, the lawsuit accuses Pump.Fun of violating securities laws by offering highly volatile memecoins. This just shows the uncertainty in the industry.

Hester Peirce’s position – that most memecoins are not securities – marks a shift from Gary Gensler’s regulatory approach. Meanwhile, the memecoin market continues to expand, but concerns over fraud and volatility persist.

The memecoin market remains a high-risk, high-reward game. Let’s wait to see what comes next.

Vignesh S G

Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

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