Gushiken Yona
Sparked by concerns over potential conflicts of interest and market manipulation, a bill, MEME Act, set to be introduced in Congress on Thursday seeks to ban U.S. officials and their families from promoting meme coins. However, the legislation’s path to passage remains highly questionable, given the current partisan divisions.
The MEME Act
The proposed legislation, dubbed the Modern Emoluments and Malfeasance Enforcement (MEME) Act, is being spearheaded by Representative Sam Liccardo, a freshman Democrat from California. Liccardo, a former federal and local prosecutor, argues that the promotion of highly speculative assets like meme coins by public officials creates an unacceptable risk of ethical breaches and financial impropriety.
“Let’s make corruption criminal again,” Liccardo said. “Our public offices belong to the public, not the officeholders, nor should they leverage their political authority for financial gain. The Trumps’ issuance of meme coins financially exploits the public for personal gain, and raises the specter of insider trading and foreign influence over the Executive Branch.”
The MEME Act would specifically prohibit the president, vice president, members of Congress, senior executive branch officials, and their spouses and dependent children from issuing, sponsoring, or endorsing a security, future, commodity, or digital asset. This broad prohibition is intended to encompass not only meme coins but also other potentially problematic financial instruments.
The Genesis of the MEME Act: The $TRUMP Meme Coin
The impetus for the legislation, according to Liccardo and supporting documents, stems largely from the launch and subsequent performance of the $TRUMP meme coin, a cryptocurrency associated with U.S. President Donald Trump. The coin, which launched shortly before Trump’s hypothetical inauguration, experienced a period of rapid price appreciation followed by a significant decline, leaving many late investors with substantial losses.
Critics allege that the timing of the coin’s launch and its association with the former president created an environment ripe for market manipulation. While there is no direct evidence proving intentional wrongdoing by Trump or his associates, the circumstances surrounding the $TRUMP meme coin have fueled concerns about the potential for similar situations to arise in the future.
MEME Act: Provisions and Penalties: A Retroactive Reach?
Beyond the core prohibition, the MEME Act includes several notable provisions. It outlines both criminal and civil penalties for violations, seeking to deter officials from engaging in the prohibited activities. Perhaps most controversially, the bill includes a retroactive element, potentially allowing for the disgorgement of profits made from assets issued before the bill’s enactment, if it were to become law.
Furthermore, the legislation would grant a private right of action, allowing individual investors who suffered losses due to an official’s promotion of a meme coin to sue for damages. This provision, Liccardo argues, is crucial for ensuring accountability, particularly given what he perceives as potential limitations in the Justice Department’s willingness to pursue such cases.
Political Hurdles and Industry Response
The MEME Act faces a steep climb in the current, Republican-controlled Congress. With the GOP holding majorities in both the House and the Senate, the bill is unlikely to advance without significant bipartisan support, which currently appears improbable.
Republican lawmakers have not yet publicly commented on the proposed legislation. However, the party’s generally pro-cryptocurrency stance and historical support for Trump suggest a challenging path forward.
The response of the industry, and general public has been mixed.
The cryptocurrency industry’s reaction has been mixed. While some industry leaders have acknowledged the need for ethical guidelines and greater transparency, others have expressed concerns about the potential for overly broad regulations that could stifle innovation, particularly in the meme coin sector.
“More importantly, how about banning them from trading on inside information,” Nigel Eccles, Co-founder and CEO of playBetHog, and Co-founder of betdexlabs and fanduel said.
Political junkie Richard Angwin commented: “The MEME Act protects the public from officials exploiting memecoins for personal gain. It’s a smart step to curb conflicts of interest and maintain trust in government, especially with tokens like $TRUMP blurring ethical lines.”
The debate over the MEME Act is likely to intensify as the bill moves through the legislative process, highlighting the ongoing tension between the desire for regulation and the desire to foster growth in the rapidly evolving digital asset space. The bill is scheduled for introduction on Thursday, and many questions will be answered, if it is introduced, and how it will fare.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
