The US SEC clarified the status of memecoins: the reaction of the crypto market
Date: 2025-02-28 Author: Henry Casey Categories: CRYPTO PAYMENTS
However, this also means that investors in such assets do not receive the protections provided by US securities laws. In the past, the SEC has accused large cryptocurrency projects of not complying with these rules.
The regulator noted that memecoins are not backed by real assets and do not have an investment component. Their value depends entirely on market demand.
“By their nature, memecoins are closer to collectibles,” the statement said.
At the same time, the SEC warns of the high volatility of such assets and their lack of utility other than entertainment or speculative function. This comment is not mandatory, but can serve as a guide for market participants.
However, not everyone at the SEC agrees with this approach. Commissioner Caroline Crenshaw expressed doubts about the decision, emphasizing that memecoins, like any financial instrument, are created for the purpose of making a profit.
Despite the SEC's clarification, the market reaction was negative. In one day, the market capitalization of the memecoin sector fell by 11%, falling below $52 billion. According to Coinmarketcap on February 28, large memecoins from the top 100 lost 8% to 15% in price in one day, and since the beginning of the year, their decline was 40-70%. The exception was TRUMP, the official memecoin of Donald Trump, which has grown by 74% since the beginning of the year, but has fallen by 85% from its January peak, falling to $11.3.
Memecoins are traditionally associated with the Solana blockchain due to low fees and high transaction speeds. However, according to Zach Pandl of Grayscale, the wave of speculation in memecoins on this platform has come to an end.
Bitwise's Matt Hougan echoed this sentiment, noting that the memecoin market has been experiencing a downturn amid controversial launches of new tokens, such as Melania Trump-linked MELANIA and Argentine President Javier Miley-backed LIBRA. The sector is also under pressure from North Korean hacker group Lazarus Group's use of memecoins to launder stolen funds from the Bybit exchange.
The downturn has also affected Pump.fun, a platform that allows you to quickly create and sell memecoins on Solana. Since the beginning of 2024, the platform has earned over $757 million, and its daily revenue previously ranged from $2-5 million, reaching $10 million on peak days. However, by the end of February, it had fallen from $3 million to $1.1 million.
The number of new tokens on Pump.fun has also dropped sharply, from 70 thousand in January to 26 thousand on February 27. Only 1% of these tokens were able to reach the minimum market cap required for listing on decentralized exchanges, while in January this figure exceeded 1.6%.
