SEC Withdraws from Meme Coin Regulation, Warns on Investor Protection

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce announced that the SEC will no longer actively regulate memecoins, including controversial tokens like the TRUMP coin, as they generally fall outside the agency's jurisdiction under securities laws. Peirce emphasized that investors should not expect SEC protection or oversight for such assets, likening the situation to the SEC's non-intervention stance during the 2021 NFT boom. She noted the agency's shift is driven by the lack of clear regulatory rules rather than political considerations, and highlighted the need for clearer frameworks to address emerging crypto assets. The TRUMP token, largely controlled by the Trump Organization, has sparked concerns about conflicts of interest and potential investor risks, but the SEC has declined to intervene. Peirce urged investors to exercise caution and understand that meme coins operate more like collectibles without the typical securities safeguards, and suggested the creation of a dedicated regulatory committee to better navigate crypto innovation. This marks a broader SEC effort to focus on drafting well-defined regulations while stepping back from enforcement in highly speculative sectors like memecoins.