The US Congress is reportedly set to consider legislation that would ban the issuance of memecoins like President Donald Trump’s Official Trump (TRUMP) token.
House Democrats are preparing to introduce the Modern Emoluments and Malfeasance Enforcement (MEME) Act, which would prohibit public officials from profiting from digital assets, California Representative Sam Liccardo told ABC News on Feb. 27.
The draft legislation would prohibit a broad range of public officials and related persons from issuing, sponsoring or endorsing any security, commodity or digital asset.
“Let’s make corruption criminal again,” Liccardo said, adding that US public offices belong to the public and that officials should not be allowed to leverage their political authority for financial gain.
Bill would apply to Melania Trump’s memecoin
The MEME Act, which is expected to be introduced on Feb. 27, will concern the president, vice president, Congress members, senior executive branch officials and their spouses and dependent children.
Liccardo said the bill has a dozen Democratic sponsors who are working to build bipartisan support.
“The Trumps’ issuance of memecoins financially exploits the public for personal gain and raises the specter of insider trading and foreign influence over the executive branch,” he stated.
Much-awaited action amid memecoin carnage
Liccardo’s initiative is one of the first attempts to regulate the nascent memecoin market amid the ongoing legal uncertainty surrounding the cryptocurrency sector.
AdvertisementGet up to $200 with Coinbase: the trusted platform for buying and managing crypto. Sign up!
Trump launched his TRUMP memecoin days before taking office on Jan. 20 , inviting his supporters to buy the token on Jan. 17.
Trump’s wife, Melania Trump, quickly followed, launching her own memecoin on Jan. 19.
Since launch, both memecoins have plummeted massively, with TRUMP
sinking
82% from its all-time highs recorded on Jan. 19 and MELANIA sliding 93%,
according
to data from CoinGecko.
As investors lose billions from the memecoin downturn, Hester Peirce, director of the US Securities and Exchange Commission’s crypto task force, said most memecoins do not fall under the SEC’s jurisdiction .
Peirce stated that oversight should come from Congress or agencies like the Commodity Futures Trading Commission (CFTC ).
Related: Memecoins are officially ‘cooked’ after Libragate, says crypto VC
Many in the community subsequently criticized regulators for not taking a proactive approach to protect investors, urging the need to establish clear regulations for the market.
Other memecoin legislation developments
Liccardo’s bill is not the only memecoin-related proposal to surface in Congress.
On Feb. 20, US Democratic Senator Cortez Masto submitted an amendment to the concurrent resolution S. Con. Res. 7, proposing to “prohibit federal employees or officials from issuing, promoting, or financially benefitting from memecoins in which the Chinese communist party invests.”
According to some crypto observers, memecoins have partly contributed to the ongoing sell-off on the cryptocurrency market.
“What crypto is digesting right now is the end of the memecoin boom,” Bitwise chief investment officer Matt Hougan said , according to the Financial Times.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions