Hester Perth, Commissioner of the Securities and Exchange Commission (SEC), will speak at the DC Blockchain Summit held in Washington, DC on Tuesday, May 24, 2022.
Valerie Plesch | Bloomberg | Getty Images
LAS VEGAS — Investors should not expect guidance to $Trump as the SEC is abolishing the business regulating meme coins, according to Hester Perth, one of the agency’s veteran commissioners.
The SEC said in February it would not be considered most memecoin securities under US federal law. Just weeks after seeing President Donald Trump launch his own memecoin, quickly increasing its value and lifting up his paper net worth in billions of dollars, crypto tokens have come out of its scope.
Peirce told CNBC that the situation was similar to when the unpleasant tokens (NFTs) became popular in 2021. They were not securities, but they increased value and fell based on investor activity in the market. Perth said the SEC missed the opportunity to publicly announce that the agency was not involved.
“Here’s there something I’ve had a lot of interest in this in the world – on Memecoin – to say, “If people expect SEC protections around these, don’t expect that,” Perth said in an interview with Bitcoin 2025 in Las Vegas. “Almost everything can be packaged into securities transactions. But in general, it’s good that people should know. I shouldn’t look for the SEC for protection in this area.”
In other words, buy at your own risk.
Since President Trump took office in January, the SEC has rewind its execution at Crypto and took a more industry-friendly approach to asset classes. It’s a controversial strategy as the president and his family benefited as they deepened their involvement in the code and led many Democrats to declare a clear conflict of interest.
Trump tokens are 80% controlled by Trump’s organization and related organizations, and are at the heart of Trump’s growing crypto empire.
Like most meme coins, tokens have no fundamental value. But after debuting in January just before the inauguration, $Trump surged to a $15 billion market capitalization backed by President Trump’s social media posts.
Within a few days, the token lost most of its value. Still, project creators receive fees for every transaction.
The White House previously told CNBC that Trump’s assets are kept in the trust his children manage, and “there is no conflict of interest.”
But Sen. Richard Blumenthal, a ranking member of the Senate Subcommittee on the Inquiry, is one of the list of Democrats warning that Trump family’s crypto-holdings could serve as a backdoor for foreign and business interests seeking access to the president.
Meanwhile, crypto billionaires once targeted by regulators like the SEC are recapturing political and financial impacts.
On Thursday, the SEC dropped its long-term lawsuit against Binance and founder Changpeng Zhao, ending one of the most offensive code enforcement measures brought on by former SEC chairman Gary Gensler.
The agency denounced misleading investors’ vinance, adding customer funds to help wealthy US users get around the restrictions. After pleading guilty to a federal money laundering violation in November 2023, Zhao served in prison for just four months, with most of his code empire appearing intact. Forbes currently estimates his net worth at over $67 billion.
Until his firing, Zhao deepened his ties with Trump-related networks. As Binance was preparing to list USD1, a new stablecoin that would benefit Trump-lined entities, Zhao revealed that he had applied for a presidential pardon from Trump’s Department of Justice. A few weeks later, Binance received $2 billion in capital injections from the Emirati State Fund to USD1.
Peirce rejected the idea that the SEC’s actions were politically motivated.
“We didn’t have a clear set of rules,” Perth said of the case of Binance. “We’ve had a lot of questions about how this particular activity in the crypto space intersects with existing securities laws. So we’re taking a step back and trying to use regulatory tools to create those rules and enforce those rules.”
That same philosophy led to the decision to withdraw the SEC’s January January decision to retract SCOUNTINTING BULLETIN 121, a controversial directive that effectively blocked traditional financial institutions from providing crypto custody.
“That wasn’t even the rules,” Perth said. “It wasn’t going through the usual process. It was just a declaration.”
She said the policy has the effect of excluded participation in crypto spaces by banks and other experienced custodians.
“In fact, I said that many traditional entities who gave Crypto custody were unable to participate,” she said.
Watch: Trump hosts exclusive gala for meme coin holders as lawmakers raise ethical concerns
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