Welcome to Latam Insights Encore, a deep dive into Latin America’s most relevant economic and crypto news from the past week. This edition examines how the recent clarification about meme coins not constituting securities could affect the Libra case, shielding founders from legal and civil actions that are already underway, putting investors at risk.
Latam Insights Encore: Libra's Case Outcome Will Set a (Likely Bad) Predecent for Meme Coins
This article was published more than a year ago. Some information may no longer be current.
WRITTEN BY
SHARE
Latam Insights Encore: Libra’s Founders Will, Most Likely, Walk Unscathed
The meme coin arena has shifted in the U.S., and with the recent clarification of the Securities and Exchange Commission (SEC) that most meme coins are not categorized as securities, taking effective legal actions against Libra’s founders will be difficult.
Read more: SEC Says Most Meme Coins Do Not Qualify as Securities
If we agree that Libra is indeed a meme coin, while it was first promoted as a funding tool for Argentine investors, this umbrella of protection could clothe the involved, who could have otherwise committed several financial crimes.
A civil action seeking retribution for the misleading launch of the token, backed by the support that Argentine President Javier Milei gave it, will be the first to take on the subject of meme coin classification, what constitutes a meme coin, and how regulation should deal with these.
Nonetheless, irregularities linked to the launch of the biggest meme coins, like TRUMP and MELANIA, make it very difficult for the current administration to recognize the problems in other similar projects.
Democrats in Congress have spoken against the current trend of meme coin mania, with U.S. Senator Elizabeth Warren and U.S. Representative Jake Auchincloss calling out the SEC for their lack of oversight on these tokens.
Read more: US Lawmakers Urge SEC to Explain Lack of Oversight on Meme Coins Amid Rising Scam Losses
In the same way, Democrat Congressman Sam Liccardo recently introduced the Modern Emoluments and Malfeasance Enforcement (MEME) Act, to ban public servants from launching and profiting from meme coins.
Read more: House Democrats Propose MEME Act to Restrict Officials From Promoting Meme Coins
However, it might prove challenging for Democrats to make any of these bills law, as Republicans have the edge both in the House and the Senate, and are very influenced by Trump’s directives.
If Libra’s founders and snipers get away with crime, it will set a bad precedent for the crypto industry in the U.S., giving a clear signal that corruption is allowed as long as there are meme coins (or any other token misleadingly identified as a meme coin) involved.
