A former chief attorney at the Commodity Futures Trading Commission (CFTC) believes the agency is well-positioned to regulate memecoins as US regulators debate which authority should oversee the controversial sector.
Elizabeth Davis, partner at the law firm Davis Wright Tremaine and an ex-CFTC chief trial attorney, said that the CFTC would be the right authority to take the helm of memecoin regulation.
“There has been an increasing focus on retail market participants, and the CFTC is focused on protecting market participants from fraud and manipulation, and this would include the retail population who are the most likely to use memecoins,” Davis told Cointelegraph.
Previously, former CFTC Chair Chris Giancarlo blamed the Securities and Exchange Commission (SEC) for the disorder in the memecoin market, while the SEC’s crypto task force head, Hester Peirce, later declared that memecoins fall outside of the agency’s purview.
Chances of CFTC becoming a memecoin regulator
The chances of the CFTC regulating memecoins likely will depend on how the broader regulatory framework for digital assets plays out, Davis suggested.
“If the CFTC gets jurisdiction over spot crypto — as the winds seem to be pointing toward — then I would say the chances are pretty good that memecoins would be included as well,” she said, adding that she would support the CFTC as a memecoin regulator.
The former CFTC attorney also expressed confidence that regulators in the United States’ digital asset laws would likely encompass memecoins in the coming year “so that it is clear to the investing public who and how memecoins will be regulated.”
Disagreement among US agencies regarding memecoin regulation
Davis also highlighted the ongoing disagreement over whether the SEC or the CFTC should be regulating the memecoin market.
According to her, that disagreement demonstrates the problems and confusion that arise from the lack of a clear regulatory framework for digital assets.
Source: TomWeb33
“The CFTC has taken an extremely expansive view of the definition of a commodity under the Commodity Exchange Act and has repeatedly extended it to encompass digital assets,” she said, adding:
“Memecoins would likely be viewed as a digital asset that falls under their broad interpretation of a commodity. The CFTC’s current jurisdictional mandate over memecoins would focus on preventing fraud or manipulation in connection with these products.”
Cointelegraph reached out to the CFTC for comment but did not receive a response.
Memecoins — cryptocurrencies often inspired by internet memes or trends — have been a burning issue in early 2025 amid the memecoin launch by US President Donald Trump and the Libra token scandal associated with Argentine President Javier Milei.
Related: Memecoins are officially ‘cooked’ after Libragate, says crypto VC
Amid investors recording losses from memecoin investments, many in the community have expressed outrage over the lack of legal clarity around memecoins, calling regulators to take the situation under control.
Trump’s WLF co-founder slammed big bets on memecoins
While regulators are yet to bring legal clarity over memecoins, Zak Folkman, co-founder of the Trump family’s crypto venture, World Liberty Financial, criticized investors for taking a careless approach to memecoin investments.
“I’m not going to give someone financial advice, but I think it’s pretty stupid to risk your entire life savings on a memecoin, right?” Folkman said.
In the meantime, local reports in Argentina recently suggested that the US Department of Justice has launched an investigation into the Milei-endorsed Libra token.
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