The recent launch of memecoins by the Trump family might lead to increased scrutiny from the U.S. Securities and Exchange Commission (SEC). Industry experts shared their insights with Cointelegraph.
On January 18, the Official Trump (TRUMP) memecoin was introduced, followed by the Official Melania (MELANIA) token on January 19. Both operate on the Solana network, just before President Donald Trump's inauguration on January 20.
These memecoins have attracted significant interest from retail investors. However, they could create regulatory challenges for the broader cryptocurrency market. Anndy Lian, a blockchain expert, pointed out that this launch sets a precedent. It blurs the lines between celebrity influence, politics, and finance. He noted that this situation may force the SEC to rethink its approach to crypto regulation in 2025.
Lian asked an important question: “Will the SEC tighten regulations to prevent market manipulation, or will they adapt by creating clearer guidelines for these tokens?”
He also warned that without strict oversight, the market could be flooded with similar tokens. This could lead to volatility, scams, and a loss of trust in cryptocurrencies. Investors have raised concerns about the token allocations, especially since nearly 90% of the Melania token supply was reportedly held in a single wallet. This is quite different from what Mrs. Trump’s official website claimed.
The introduction of these political memecoins highlights a gray area for U.S. regulators. While the Trump administration has shown a more crypto-friendly stance, these new memecoins present unique challenges. Steve Milton, CEO of the Fintopio CeDeFi wallet app, described the situation as both a "step forward and backward" for the industry.
Milton emphasized the need for understanding and cooperative regulators to foster innovation. He expressed concern that this memecoin launch could add to regulatory uncertainty, as it aligns with the kind of retail speculation the SEC aims to mitigate.
On a positive note, both TRUMP and MELANIA memecoins have attracted new retail investors to the crypto space. Ryan Lee, chief analyst at Bitget Research, mentioned that the launch has created new speculative demand and market liquidity. Many new investors entered through the Moonshot platform, showing the broad appeal of celebrity-backed tokens.
As of now, the TRUMP token has dropped more than 49% from its peak of $75.35, which occurred on January 19. It has fallen over 24% in the last 24 hours, according to CoinMarketCap.