U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has clarified that meme coins, including the $TRUMP token, do not fall under the agency’s regulatory purview. This stance has significant implications for investors and the broader cryptocurrency market.
SEC’s Position on Meme Coins
In a recent interview, Commissioner Peirce emphasized that many meme coins, such as $TRUMP, are not considered securities under U.S. federal law. She noted that these tokens are often created for entertainment purposes and lack the characteristics that would classify them as investment contracts. As a result, they do not fall within the SEC’s jurisdiction, and investors should not expect federal protections typically afforded to securities .
The SEC’s Division of Corporation Finance has further clarified that meme coins are primarily used for trading and entertainment, with their value driven by market demand and speculation. They do not convey rights to future income, profits, or business assets, distinguishing them from traditional securities .gtlaw-financialservicesobserver.com+10dechert.com+10perplexity.ai+10
The $TRUMP Token: A Case Study
The $TRUMP token, launched in January 2025, is a meme coin associated with former President Donald Trump. Despite its initial surge in value, the token has faced criticism for enabling potential influence-buying, especially after Trump offered private dinners to top token holders . The SEC’s decision not to regulate such tokens has raised concerns about market manipulation and the need for clearer legislative guidelines .bravenewcoin.com+4en.wikipedia.org+4perplexity.ai+4en.wikipedia.org+2thedailybeast.com+2theguardian.com+2
⚖️ Implications for Investors
With the SEC stepping back from regulating meme coins, investors are left without the protections typically associated with securities. This lack of oversight increases the risk of market manipulation, fraud, and other unethical practices. Experts caution that individuals should exercise caution and conduct thorough research before investing in such speculative assets .crypto.news+1bravenewcoin.com+1
Looking Ahead
The SEC’s position on meme coins highlights the need for updated legislation to address the evolving cryptocurrency landscape. As digital assets continue to gain popularity, lawmakers and regulators must collaborate to establish clear guidelines that protect investors while fostering innovation in the crypto space.
