The current meta of memecoin grifting is a direct result of the historical failure and corruption of Gary Gensler's SEC. Over his four year tenure as Chairman of the U.S. SEC, Gensler had the opportunity to establish clear rules and regulations regarding the issuance, custody, and trading of cryptocurrencies. This is something the crypto industry has been asking for over a decade, including traditional institutions who wanted to offer crypto products. Instead of helping the crypto industry navigate the complex regulatory environment (e.g., issuing no-action letters, creating new rules and exceptions, etc), Gensler engaged in politically-motivated attacks and unfair prosecutions against the crypto industry's best actors. The strategy was two-fold: 1. Go after small crypto businesses and token issuers who were already on the brink of bankruptcy and couldn't afford to challenge a lawsuit in the courts. Inevitably they settle for a fine and/or are forced to shut down. They then used misleading reasoning and made-up terminology like "unregistered crypto asset securities" in the settlement press release to create a chilling effect for everyone else trying to build in crypto. 2. Go after the core infrastructure of the crypto industry (e.g., exchanges and infra) using the precedence set when going against the small fish. They used those lawsuits to also label a bunch of other cryptocurrencies as "unregistered crypto asset securities" without giving those token issuers an opportunity to defend themselves, resulting in mass delistings. This process really kicked off after the explosion of the FTX fraud when it was revealed that SBF had been working with SEC/CFTC regulators and even met with Gensler personally to engage in regulatory capture of the industry. This created a massive black eye for the SEC and therefore they had to "look tough" to save face, resulting in this overreaction. The final plan of attack was to try and kill Ethereum by claiming the PoS merge made ETH a security, but this was halted by an unnamed force when the SEC's crypto strategy become a political liability for Democrats in the 2024 election cycle when Trump became the "pro-crypto president." While all this was happening, what was the one segment of the crypto industry that Gensler largely ignored? The issuance and sale of intrinsically worthless memecoins to retail investors. If you were a builder in crypto, you had two options: 1. Create a legitimate crypto protocol or company that attempts to solve a real problem, often involving the issuance of a token that accrues value from the success of the protocol or business (dividends, buy-backs, etc). But take on the massive legal and regulatory risk of being subpoena'd and sued into oblivion, risking destroying everything you created. 2. Issuing an intrinsically worthless memecoin, which can be used as a pump-and-dump to extract value from retail investors (e.g., bundling, sniping, wash trading, etc), providing a higher ROI and lower legal/regulatory risk, knowing it's unlikely regulators will target you. Gensler created a malformed incentive structure in crypto where the only safe route was to issue worthless tokens that only exist as exploitative lottery tickets by insiders, rather than create something that could actually create value for society. With Gensler now gone, we are starting to turn a new page for U.S. SEC + crypto relations. As U.S. SEC Commissioner @HesterPeirce (Chairmen of the newly created SEC Crypto Task Force) put it, "it took us a long time to get into this mess, and it is going to take us some time to get out of it." The solution to memecoin grifting is not social layer virtue signaling, but the credible threat of prosecutions and jailtime for engaging in activities that are already illegal (wire fraud, market manipulation, insider trading, etc). It's unclear if memecoins will ultimately come under the scope of the SEC, the CFTC, or someone else, but time is running short, and so the worst of the worst are throwing their hat into the memecoin grift ring before the grifting gets shut down for good. I anticipate this will eventually lead to a "flight to quality" as people re-asses their priors and gravitate back toward underpriced legitimate projects as the legal/regulatory risks dissipate and clear rules/regulations are established. I don't know about you, but I'm ready for the crypto industry to finally move from this stage of grifting.