Who will regulate meme cryptos?

In the world of crypto, memecoins seem to evolve in a parallel universe, where the law is as absent as a winning lottery ticket.

In the realm of crypto, memecoins appear to be evolving in a parallel universe, where regulation is as scarce as a winning lottery ticket. Billions of dollars in losses are being incurred, yet regulators seem to be diverting their attention elsewhere. The latest example is the TRUMP token, which has seen $2 billion evaporate in a matter of weeks, leaving its investors worse off than a debt-ridden trader during a financial crisis. The question now is: who will regulate these meme cryptos?

TRUMP, the 2 billion dollar rollercoaster

Launched on January 17, the TRUMP memecoin soared to $72.60 in 48 hours before plummeting 80%, going from a valuation of $14.5 billion to $3 billion. The result? 813,000 crypto investors were left devastated.

At the same time, the Trump Organization and its partners collected $100 million in trading fees. A jackpot for some, a catastrophe for others.

A few figures to illustrate the extent of the disaster:

According to Hester Peirce, SEC Commissioner, these memecoins “likely do not fit within the current regulatory framework”. She believes that it is up to Congress or the CFTC (Commodity Futures Trading Commission) to address the issue.

Nate Geraci, president of the ETF Store, shares her view:

” Memecoins are more akin to collectibles than financial instruments”.

Who will regulate meme cryptos?

Leaving the crypto market to self-regulate is like asking cats to supervise an aquarium. Lyn Alden, a macroeconomic analyst, points out that the same pattern keeps recurring with each cycle:

” The same skeptics of traditional finance who mocked Bitcoin in 2017 because of ICOs, DeFi, and NFTs now reject it because of memecoins”.

In essence, history repeats itself, and regulators are constantly playing catch-up.

With the boom of ETFs on altcoins and meme cryptos under the Trump administration, the very definition of a financial asset could be changing. The SEC, under Biden's presidency, has considered bitcoin to be the only cryptocurrency that is definitively classified as a commodity.

But what about tomorrow? With ETFs on Solana, Dogecoin, and even TRUMP in the pipeline, the line between absurd speculation and recognized investment is becoming more blurred than an Airbnb rental agreement.

Ultimately, the crypto market remains a jungle, where a select few reap the profits while the masses are left to suffer the consequences. But when Elon Musk sees his father trying to raise $200 million with a questionable memecoin, it does raise a few eyebrows.

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La révolution blockchain et crypto est en marche ! Et le jour où les impacts se feront ressentir sur l’économie la plus vulnérable de ce Monde, contre toute espérance, je dirai que j’y étais pour quelque chose