The world’s most popular meme coin Dogecoin is a security and will be regulated, says CNBC’s Mad Money host Jim Cramer. The former hedge fund manager warned about the dangers of dogecoin. Thanks to Elon Musk, the price and popularity of DOGE has significantly peaked.
Cramer urged investors to be careful with dogecoin. He said they will find out how many there are and how many are being created each day for the exchanges. However, his comments haven’t gone down well with the industry. Billy Markus, the co-founder of Dogecoin, adviced the Mad Money host to learn how blockchain works. He said its in the public code on the public blockchain. It is easily viewed by anyone.
In terms of security, Markus says it is a proof-of-work cryptocurrency. One has to put in work to retrieve the coins from the block and it doesn’t qualify under the Howey Test. Moreover, dogecoin works the same as bitcoin. Markus pointed out that its 99.5% the same code as BTC. He described Cramer’s warning as “The biggest bull signal ever for dogecoin”.
Preston Byrne, a partner at Anderson Kill, believes Cramer is wrong about dogecoin being a security. He explained that whether a token is regulated as a security, properly an investment contract under the US federal law, depends on whether the thing is a contract, transaction or scheme, which involves investment of money in a common enterprise. Byrne said the DOGE’s anarchic, jokey start and lack of central coordinating entity means that Howey Test has not been met at all.
What it means is that, dogecoin is not a security. It wouldn’t fall in the ambit of the Security and Exchange Commission. DOGE is categorized as a commodity and the Commodity Futures Trading Commission treats it as the same. Overall, dogecoin is considered as a light-hearted and safe-form of cryptocurrency, make it the people’s crypto.