Pro-crypto Hester Peirce, who serves on the U.S. Securities and Exchange Commission (SEC), is warning memecoin traders that they are on their own when it comes to losses.
In a new interview on the Bankless podcast, Peirce, who is leading the SEC’s new crypto task force, says memecoins may fall outside the federal regulatory agency’s purview.
She suggests that memecoin traders need to manage their risks and not rely on the government to bail them out if they suffer big losses.
“Just because something is out there and it’s popular does not mean that it will fit within the SEC jurisdiction. So I just caution people not to assume that there’s going to be an SEC regulatory backstop to everything…
I am a big believer in people having the freedom to be able to use their money in whatever way they want. But you should not assume that there is going to be a government agency there to set the rules for that or, at the end of the day when the price of something goes down, to make you whole. That just is not something you should expect.”
Peirce adds that memecoin traders should take responsibility for their own financial decisions.
“I would send the same message to institutions who are building things. Just because you get big and you’re doing something that you’ve got a big footprint does not mean that the government is going to come in and bail you out when you’re getting ready to head for bankruptcy, right?
So I think if we really want to live in a place where people have choices, we have to accept the responsibility that goes with those choices. People have fun with memecoins and a lot of other kinds of things and that’s completely fine, but don’t assume that there is an SEC regulatory presence there. There may be, again, facts and circumstances matter, but don’t assume that.”
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