- The host of CNBC’s Mad Money show has warned investors that Dogecoin (DOGE) is a security that will soon be regulated.
- The meme-token’s co-founder called him out for his supposed ‘ignorance’ on blockchain fundamentals, saying the token does not qualify the Howey test.
Jim Cramer, the host of CNBC’s Mad Money show and a crypto critic, has issued a warning to the Dogecoin (DOGE) investors. According to him, the meme cryptocurrency’s purpose is to make money for crypto exchanges. Additionally, he has it that DOGE is a security that will face regulation from the US Securities and Exchange Commission (SEC) soon.
On multiple occasions, Cramer has blasted digital assets, even once saying that they are “gambling on crowd psychology.” He has also made it clear time and again that he is not a fan of the Shiba Inu-themed cryptocurrency. Even when DOGE shone at its peak in April 2021, Cramer’s reproach did not fail.
Dogecoin falls under US securities law – Cramer
His latest tweet about cryptocurrency reads:
Please be careful with Dogecoin…It is security. It will be regulated. We will find out how many there are and how many are being created each day to make money for the exchanges.
Quite sarcastically, Dogecoin Co-founder Billy Markus asked Cramer to “educate” himself, saying:
Bro, please learn how blockchain works. It’s already well known how many there are and how many are created every day. it is in the public code on the public blockchain, easily viewable by anyone.
Additionally, Markus notes Dogecoin does not qualify the Howey test – a US Supreme Court case used as a reference on whether a transaction is an investment contract or not. He adds that it is a proof-of-work cryptocurrency that is 99.5 percent alike to Bitcoin (BTC). The former has been cleared by the SEC as an asset and not a security, according to a public letter dated Oct. 1, 2019.
Regulation of crypto in 2022
In a recent CNBC interview, SEC Chair Gary Gensler clarified that all crypto projects raising funds from the public fall under the US security laws. And even though he declined commenting about any cryptocurrency, he urged such projects to promptly register with the regulator. Tougher measures and actions towards the crypto industry are expected from the watchdog this year, according to several crypto analysts.
DOGE, ranked the 11th largest cryptocurrency by market value, was trading at $0.152370 at writing time. This is a 9.7 percent loss in the day, just like Bitcoin’s, which now trades at $38,087 following this Friday’s price slash.
Analysts think the coin is due for a price movement reversal. One of them is Rafaela Rigo, who believes Dogecoin could hold a $0.16 support before bouncing back and beginning an uptrend.