SEC regulations support meme coins over actual projects, says Chris Dixon
- Current regulations allow meme coins to thrive, while actual projects are being shut down.
- Chris Dixon suggests better regulations instead of fewer regulations on cryptocurrencies.
- Meme coin category down following Dixon's article.
Chris Dixon, a general partner at crypto fund A16z and author of Read Write Own, wrote in an article on Monday about the growing regulatory actions against crypto projects, stating that crypto regulations must not prioritize memes over matter. Several meme coins are experiencing losses following the article’s publication.
Also read: Solana, Base and AI meme coins rally, are speculative tokens making a comeback?
Regulations favor meme coins
With the continuous spread of lawsuits against crypto bodies, concerns about government regulations have greatly risen, causing much worry about the future of crypto in the US.
In his post, Chris Dixon highlights the absurdity of this US regulatory regime, stating how meme-only tokens are allowed to thrive. At the same time, crypto companies and blockchain solutions face continuous attacks.
He opines that the Securities & Exchange Commission's (SEC) "role is to protect investors; to maintain fair, orderly and efficient markets, and to facilitate capital formation." Dixon decries the SEC's failure to carry out its objectives, especially with digital assets.
"Current regulations encourage platforms to list meme coins and not other, more useful tokens that make it possible for individuals and communities to own internet platforms and services," said Dixon.
Read more: Meme coin madness returns after Bitcoin halving concludes
Meme coins are freely allowed to trend on markets without any regulations against them, yet "more innovative projects struggle."
Following the release of Dixon's article, several meme coins have taken in losses with Dogecoin (DOGE), Shiba Inu (SHIBA), Pepe (PEPE), dogwifhat (WIF), Bonk (BONK) and Floki Inu (FLOKI) all down more than 4%.
Dixon's article follows a response by Eddy Lazzarin, the CTO of A16z crypto, who recently alleged that memecoins are like "a risky casino" in reply to an X post.
Interest in memecoins will come and go, and I'm optimistic that real products/protocols will develop in the end.
— Eddy Lazzarin (@eddylazzarin) April 24, 2024
But we shouldn't pretend that the casino doesn't set us back. Deterring great founders and giving ammo to politicized regulators has a profound effect. https://t.co/PZNjnSLqfb
According to Dixon, the solution isn't fewer regulations on cryptocurrencies but better ones. He suggested "...adding well-tailored disclosures to provide regular investors with more information."
Also read: XRP rallies as Ripple slams SEC for penalties, asks regulator to establish likelihood of future violations
He also suggests regulators should "require long lock-up periods to prevent get-rich-quick schemes."
Several crypto institutions, including Uniswap, Coinbase, Ripple and Consensys, are currently in legal battles with the SEC.
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