Memecoin investors should realize that the U.S. Securities and Exchange Commission (SEC) will not come to their aid if they lose their money, Commissioner Hester Peirce told CNBC on Friday. Peirce, who was appointed by now crypto-friendly President Donald Trump in 2018 and heads the SEC’s newly created Crypto Task Force, noted:
“…generally, it’s good for people to know, I should not be looking to the SEC for protection in this area [memecoin investments].”
Memecoins are outside the SEC’s regulatory scope
Peirce’s latest comments are a reiteration of her February remarks, when she said:
“…many of the memecoins that are out there probably do not have a home in the SEC under our current set of regulations.”
At the time, Peirce noted that the SEC does not consider most memecoins to be securities, highlighting the need for clear legislative guidelines defining the SEC’s regulatory scope. She had also stated that the U.S. Commodity Futures Trading Commission (CFTC) might be better suited to regulate these assets.
In her interview at Bitcoin 2025, Peirce noted that while it is possible to “package almost anything into a securities transaction,” most memecoins do not fall into the category. Therefore, memecoins fall outside the regulatory purview of the SEC. She added:
“Here was something where I saw a lot of interest in this out in the world — in meme coins — and it made sense for us to say, ‘People, if you are expecting that there’s SEC protection around these, you should not expect that.”
Peirce likened the rising interest in memecoins, which have no intrinsic value, to that of non-fungible tokens (NFTs). Like memecoins, most NFTs lost their value significantly after initial interest died down.
Peirce’s comments echoed those of David Sacks, the White House crypto czar, who suggested that memecoins should be treated as collectibles.
Trump memecoin investors are on their own
The Official Trump memecoin soared to a market capitalization of $30 billion just before his inauguration, only to nose-dive soon after. Small investors of the memecoin reportedly lost $2 billion when the price of $TRUMP crashed.
However, Trump-linked entities, which control over 80% of the memecoin’s supply, made at least $100 million in trading fees by Jan. 30. Similarly, insiders reportedly earned around $100 million by investing in the memecoin of Melania Trump, the U.S. First Lady, hours before its launch was made public.
Trump’s deepening ties with the crypto world have raised concerns of conflict of interest as the sitting president stands to profit from his own policies. Trump also held a gala dinner for the top 220 holders of his memecoin earlier this month, which ignited heavy controversy.
Several lawmakers have claimed that the gala dinner, which elicited mixed responses from attendees, half of whom had sold the memecoin before the event, was a way for foreign companies and investors to gain access to Trump. The White House, however, has dismissed all claims of conflict of interest.
Peirce’s comments indicate that investors who lost money on the token cannot hope for any assistance or guidance from the SEC. In other words, the SEC has washed its hands of memecoins, which are increasingly being used to perpetrate scams and rug-pulls by miscreants, leaving investors to fend for themselves.
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