As meme coins continue to grow in popularity, regulators such as the SEC are increasingly scrutinizing the activities of these altcoin projects. Recently, one of the leading meme coins, SafeMoon, faced allegations of a fraudulent investment. Therefore, there is a possibility that the SEC will now call four altcoins fraudulent activity. Let’s look at the details.
Altcoin SafeMoon: A case study
The SEC’s investigation into SafeMoon found that the project had no legitimate use case or benefit. This unsustainable model ultimately led the SEC to declare SafeMoon a fraudulent investment. The collapse resulting from this announcement caused a sharp decline in the value of the altcoin SafeMoon. It caused significant losses for many investors.
The SEC’s decision to label altcoin SafeMoon as a fraudulent investment highlights the risks associated with meme coins. This case serves as a warning for investors. It also raises questions about other cryptocurrencies that may have similar features.
Features of meme coins at risk
To identify meme coins that may face similar scrutiny from the SEC, it is crucial to understand their fundamental characteristics. The following features are common to many meme coins. It can also attract the attention of regulatory agencies. First up is the lack of benefits. Afterwards, anonymous development teams are the most important reason. On the other hand, the rapid rise and fall of the price points to another reason.
In such projects, there are also problems in the number of tokens and distribution mechanisms. On the other hand, marketing that misleads buyers can trigger regulators. Finally, lack of transparency and rapid growth also push these altcoin projects onto the SEC’s radar.
Possible altcoin projects at risk
It is not possible to predict with certainty which altcoin projects may be targeted by regulators in the future. A few tokens exhibit some of the features mentioned above. Some notable altcoin projects that are gaining attention in the crypto space and may face regulatory scrutiny include Shiba Inu (SHIB). Often referred to as the “Dogecoin killer,” the Shiba Inu gained popularity in 2020. There is no clear use case. It also has an anonymous development team.
Altcoin Dogecoin (DOGE) has the potential to be on the SEC’s radar. Although initially created as a joke, Dogecoin remains a popular meme coin. Its high-profile approvals and lack of a clear use case can attract the attention of regulatory authorities. Altcoin SafeMars has a similar redistribution mechanism and lack of transparency. These features can make it a potential target for regulatory authorities. cryptokoin.com When we look at it, the last one is Akita Inu (AKITA). Akita Inu, like SHIB, is another meme coin associated with the Shiba Inu dog breed. It has similar features such as lack of usage and an anonymous team.