- SEC Commissioner Hester Peirce challenges the agency’s control over memecoins, arguing that Congress or the CFTC should regulate them instead of broad SEC oversight.
- The memecoin market surged 500% to $120 billion in 2024, sparking legal battles over securities laws and calls for clearer regulations.
The Securities and Exchange Commission (SEC) faces an internal divide over memecoin regulation. Commissioner Hester Peirce has directly opposed the agency’s broad control over digital assets, countering the aggressive enforcement led by former SEC Chair Gary Gensler. This internal clash carries significant weight, with major implications for cryptocurrency oversight in the United States.
TODAY: SEC Commissioner Hester Peirce says “many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations.” pic.twitter.com/HSA39pQ5W1
— The Wolf Of All Streets (@scottmelker) February 11, 2025
Peirce now heads a crypto task force formed by President Donald Trump to classify digital assets. With billions in circulation, the debate extends beyond regulatory policy to control over a rapidly expanding financial sector. She argues that most memecoins fall outside SEC jurisdiction, advocating for congressional oversight or regulation by the Commodity Futures Trading Commission (CFTC).
Gensler’s tenure saw relentless legal action against major crypto platforms, including Binance, Coinbase, and Kraken. His approach relied on the Howey Test to label many digital assets as securities, framing memecoins as high-risk speculative bets. Peirce is now pushing for a shift that fosters innovation rather than imposing strict regulatory barriers.
Trump’s Meme Token—SEC Regulation in Question?
The debate over memecoins gained more attention after President Trump and the First Lady launched their own meme token. This raised fresh concerns about the SEC’s role in regulating such assets. Peirce, known for her pro-crypto stance, acknowledged the regulatory uncertainty but doubled down on her belief that the SEC is not the right agency to handle the memecoin craze.
“Many of the memecoins out there probably don’t have a home in the SEC under our current set of regulations,” Peirce said.
If Congress wants to address, they can do that; maybe something that the CFTC wants to address, but many of those, I think, probably are not under our jurisdiction.
This perspective marks a significant shift from Gensler’s approach, which classified memecoins as securities because investors typically buy them expecting massive profits. Regulatory analysts have compared the memecoin boom to gambling, given their extreme volatility and history of pump-and-dump schemes.
The Billion-Dollar Boom & Rising Lawsuits
Memecoins have been around for over a decade, but 2024 saw a staggering 500% surge in their market capitalization, reaching $120 billion. This explosion was fueled by the popularity of Solana-based platforms such as pump.fun, which made it easier than ever to launch meme tokens. However, with that rapid growth came increasing legal scrutiny.
Last month, a memecoin investor filed a proposed class-action lawsuit against pump.fun, accusing the platform of violating securities laws by promoting highly volatile assets. Represented by U.S. law firms Wolf Popper and Burwick, the plaintiff likened pump.fun’s operations to a Ponzi scheme, adding more legal pressure to the already controversial market.
“We’ve just put roadblock after roadblock up against people who are trying to come in and talk to us. So all I’m asking is that we have an innovation policy that allows people to innovate, that allows people to try new things,” Peirce told Bloomberg.
While the SEC traditionally oversees securities markets, Peirce argues that its current rulebook does not extend to most memecoins. She believes that Congress and the CFTC are in a better position to regulate the space. If lawmakers take up the issue, new legislation could redefine how memecoins are classified and traded.
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