From Trump tokens to LIBRA lows: Meme coin circus rolls on, bolstered by recent SEC ruling
## The Meme Coin Wild West: A Regulatory Showdown
2024 saw meme coins explode in popularity, attracting both enthusiastic investors and harsh critics. The launch of the Official Trump (TRUMP) token, a spectacular failure costing investors over $2 billion, highlighted the sector’s volatility and potential for abuse. This event, along with similar political coin launches globally, fueled calls for regulation.
**The Political Fallout:** Democrats, alarmed by the TRUMP token’s implications for corruption and foreign influence, introduced the MEME Act. This bill aims to prevent US officials from launching or endorsing cryptocurrencies, forcing the disgorgement of profits from ventures like the TRUMP token. While facing an uphill battle in the Republican-controlled House, the bill’s proponents believe it could gain traction as the political climate shifts. Meanwhile, the Trump family plans to launch a branded metaverse and NFT marketplace.
**The SEC’s Stance:** The SEC, under its new leadership, declared meme coins are not securities, effectively removing them from its regulatory purview. While this allows for continued meme coin creation, it’s coupled with a warning about the inherent volatility of these assets. This decision contrasts sharply with criticisms that the previous SEC administration selectively targeted legitimate projects while ignoring the rampant speculation in the meme coin space.
**The Market’s Reaction:** The Solana-based meme coin launchpad, Pump.Fun, saw its tokens plummet by 80%, reflecting a broader downturn impacting the meme coin market. Some speculate this is due to the Libra coin’s failure and broader market conditions, but the long-term impact remains uncertain.
**The Future of Meme Coins:** The analogy to the legalization of cannabis is apt: an initial period of wild growth followed by a potential for maturation and regulation. Whether meme coins will follow a similar path, moving from a speculative frenzy to a more regulated and established market, remains to be seen. The long-term consequences of the lack of early intervention and the SEC’s current position are still unfolding.
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