The former president of the Commodity Futures Trading Commission (CFTC), Chris Giancarlo, believes that the Securities and Exchange Commission (SEC) is to blame for the proliferation of memecoins in the market. According to Giancarlo, the SEC’s restrictions on many altcoins have created an environment where memecoins, which often lack intrinsic value, have become the most viable investment options.
Giancarlo’s comments came during a recent interview on the Thinking Crypto podcast, where he argued that the SEC’s actions have been aimed at eliminating tokens with real utility. “They attacked everything that had associated value, creating a panorama where memecoins, without intrinsic value, were the only thing left,” he said. The former CFTC head also described the SEC’s regulatory approach as an “abuse of authority,” suggesting that it is hindering the development of the digital asset industry in the United States.
Giancarlo is not alone in his criticism of the SEC. Changpeng “CZ” Zhao, the former CEO of Binance, has also pointed to the SEC as responsible for the growth of memecoins. Zhao has argued that the regulator’s aggressive stance against utility tokens forced investors to seek refuge in speculative assets. “During the last four years, a powerful regulatory agency demanded almost all tokens projects with some usefulness, falsely claiming that they were securities. As a result, people began to launch memecoins,” he declared.
This situation has created uncertainty in the market, with innovative projects struggling to operate legally while memecoins thrive without major regulatory repercussions. The SEC’s approach has been aimed at classifying almost all digital assets as securities, with the exception of Bitcoin. However, the agency’s leadership has changed since Gary Gensler’s resignation, and the new interim president, Mark Uyeda, has appointed Hester Peirce to head a working group specialized in cryptocurrencies.
Peirce has suggested that many memecoins may not be under the jurisdiction of the SEC, stating that “we always have to analyze the facts and circumstances, but many of the memecoins that exist probably do not have a place in the SEC under our current set of regulations.” This could mean that the supervision of memecoins would fall on the CFTC or a new legislation from Congress to be properly regulated.
The impact on the cryptocurrency market has been significant, with a recent study revealing that 76% of influencers on X have promoted memecoins that are now “dead.” The report also indicates that about 80% of these memecoins lost 70% of their value in just one week. As new laws are discussed and regulatory agencies are reorganized, investors are hoping for a clearer and more balanced environment that does not inadvertently foster speculative assets without real support.
It’s worth noting that investments in crypto assets are not regulated in some countries and may not be appropriate for retail investors, as the total inverted amount could be lost. It’s essential to see your country’s laws before investing and to be aware of the risks involved.
