Caroline Crenshaw, a Commissioner at the US Securities and Exchange Commission (SEC), has expressed disagreement with the agency’s recent classification of memecoins as non-securities.
In a statement issued on Feb. 27, Crenshaw argued that memecoins could meet the Howey test criteria for securities, particularly the requirement that profits arise from the efforts of third parties. She pointed to the collaboration between developer teams and promoters as evidence of this.
She further criticized the SEC’s new guidance, which claims that memecoins are simply digital trends with speculative value and extreme volatility rather than financial instruments. According to Crenshaw, this broad definition could encompass nearly all cryptocurrencies, undermining their regulatory status.
“The SEC’s statement today portrays memecoins as nothing more than cultural phenomena meant for entertainment and social interaction. In reality, like any other financial asset, memecoins are created with profit in mind,” Crenshaw stated.
The increasing number of scams, hacks, and even political figures launching their own memecoins has intensified regulatory scrutiny, raising concerns about the long-term implications for the sector.
US Lawmakers Seek to Regulate Memecoins
Following the launch of a memecoin tied to US President Donald Trump, some Democratic lawmakers, including Senator Elizabeth Warren, have urged authorities to investigate potential ethical violations.
On Feb. 27, Congressman Sam Liccardo from California revealed that House Democrats are drafting legislation aimed at banning presidential memecoins.
The proposed bill, known as the Modern Emoluments and Malfeasance Enforcement (MEME) Act, would prohibit US legislators from promoting, creating, or endorsing digital assets. It would also extend to their spouses and dependents, as well as senior officials in the executive branch, including the president and vice president.
Former Commodity Futures Trading Commission (CFTC) attorney Elizabeth Davis recently suggested that the CFTC should oversee memecoins. Speaking, Davis asserted that if the agency gains broader crypto regulatory authority, memecoins would likely fall under its jurisdiction.
She also predicted that the US will introduce comprehensive memecoin regulations within the next year, resolving current uncertainties surrounding social tokens.
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