Last weekend, CZ and Dogs, Argentina’s President and LIBRA gave the MEMECoin market a “surprise”.I originally thought it was a big shot, but I didn’t expect it to be a big shot.

If you missed these two wonderful performances, lawyer Mankun will give you a summary first:

CZ Event: One sentence triggers a MEME coin frenzy, BNB Chain falls into chaos

CZ accidentally mentioned pet dogs on social media, causing crazy speculation on the dog’s name in the market.In the end, CZ announced the pet name “Broccoli”, which caused a large number of MEME coins of the same name to appear on BNB Chain, causing a surge in on-chain trading volume and network congestion, and some investors suffered losses due to market chaos and speculative trading.

Argentina Presidential Incident: Official endorsement of MEME currency, LIBRA soars

Argentine President Milei announced the issuance of MEME currency LIBRA on social media and announced the contract address, causing the market to soar to a market value of US$5 billion.However, just a few hours later, Milei deleted the tweet and distanced the relationship, causing LIBRA to plummet to below $200 million, and some insider traders accurately bought and cashed out more than $100 million.

These two incidents reminded lawyer Mankun again of the start of the 2025 king bomb. Trump issued MEMECoin, which set a precedent for national leaders to issue virtual tokens.These events and market reactions have once again verified the extreme speculative nature of the MEME currency market and also demonstrated the direct impact of social media and celebrity effects on the crypto market.

However, when the remarks, hints and even jokes of these well-known figures can cause violent market fluctuations, how should we protect the rights and interests of ordinary people?In particular, the LIBRA incident also seems to involve legal issues such as market manipulation and insider trading. How should these phenomena be regulated through laws?

Next, lawyer Mankun will discuss the legal blind spots behind the MEME currency craze.

Legal liability for celebrity speech

These two cases of CZ and the Argentine president once again confirm the celebrity effect.Especially in an extremely speculative market like MEME coins, the influence of celebrities will be exponentially amplified – a simple tweet and an unintentional photo are enough to make the MEME market experience a drastic turbulence.

Then the problem is,Should these celebrities be responsible for market volatility?Could their remarks constitute market manipulation?

From a legal perspective, whether the market influence of celebrities constitutes legal responsibility lies in whether their remarks involve market manipulation or misleading the market.

In traditional securities markets, if executives of listed companies make misleading remarks that lead to large fluctuations in stock prices, they are often considered to constitute market manipulation or false propaganda.However, in the MEME currency market, it is still controversial whether similar behaviors should be subject to the same legal constraints.

For example, Elon Musk has published some content about Doge on X (formerly Twitter) many times for a long time, and each release will inevitably cause severe market fluctuations.The SEC has investigated whether he was involved in market manipulation, but because his remarks did not directly promise return on investment and did not manipulate transactions, it was not considered illegal.This is similar to the case of CZ – although he triggered a market speculation frenzy, he did not directly push the currency and did not mislead investors, so it is difficult to be considered as market manipulation under the current legal framework.

However, the situation for Argentine President Milei is completely different.Not only did he announce the launch of MEME currency LIBRA on official social media, he also announced the contract address, and the market soared to $5 billion, and then quickly plummeted to $200 million.His remarks directly affect market sentiment and have an official government background, which easily leads investors to mistakenly believe that the token has received government support.Although Milei later deleted the tweet and tried to disconnect, the huge market volatility had serious consequences.

In the U.S. securities law, if corporate executives or celebrities make comments that affect the market, they usually need to disclose their own interests, otherwise they may be regarded as misleading.For example: Kim Kardashian was fined $1.26 million by the SEC for not disclosing the promotional fees; Floyd Mayweather was fined by the SEC for not disclosing the endorsement fees of the ICO project Centra Tech; In addition, Elon Musk affected Tesla’s stock price due to tweets,He was investigated and fined by the SEC. Although it was not considered a market manipulation, it imposed relevant restrictions on the release of information about Tesla.

In contrast, Milei’s behavior is more similar to these cases.His tweets had a huge impact on the market trend of LIBRA coins, and then deleted the tweets to clear the relationship.If the MEME currency market is subject to stricter regulation, this behavior may be considered a market misleading and may even involve market manipulation.

Therefore, although both CZ and Milei use the influence of social media, there are significant differences in legal risks – the former is a “catalyst of market sentiment” and the latter may be “market misleading participants.”

The celebrity influence of the MEME currency market is becoming a new challenge in legal supervision, and how to define this legal red line may become the focus of future regulatory agencies.

Regulatory Challenges of Insider Trading

There is another point that has been criticized in this MEME currency carnival, namely the problem of insider trading.

In traditional financial markets, insider trading is an illegal act, and regulators will strictly punish those who obtain market information in advance and use it to make profits.However, in the crypto market, especially in the MEME currency field, the legal definition of insider trading is still relatively vague.

In this LIBRA incident, multiple wallets extracted a large amount of USDC and SOL through exchanges such as Binance and Bybit within a few hours before the president’s tweet, and then bought accurately in the first second of LIBRA’s release and in the marketWhen the emotions were at their craziest, they sold out and eventually cashed out more than $100 million.In addition, wallet addresses related to the project were also found to have large-scale liquidity removal, with a total cash out of more than US$107 million.

In other words, some people had already ambushed in advance before obtaining the president’s information about to release tokens, and completed the trading operations accurately, which eventually led to ordinary investors becoming victims of liquidity exit.This trading model is highly similar to insider trading in the traditional securities market.

So,Does Milei’s behavior constitute insider trading?This depends on two key legal issues:

Is Milei aware?

If Milei knows and discloses information about LIBRA tokens to specific people in advance before tweeting, this undoubtedly constitutes a typical insider trading from the perspective of traditional financial markets.On the contrary, if he is unaware, he may only be considered misleading the market.

Is MEME currency applicable to insider trading regulations?

In the crypto market, especially the MEME currency market, the legal definition of insider trading is still very controversial.The current securities laws mainly target traditional stocks, bonds and other financial products, while MEME coins are often classified as “community-driven decentralized assets” and lack a clear legal definition.Therefore, even if Milei and his team are really associated with these early buying addresses, they may not be able to directly apply insider trading regulations in the securities market.However, in 2022, the U.S. Department of Justice (DOJ) filed insider trading allegations against former Coinbase product manager Ishan Wahi, his brother Nikhil Wahi and friend Sameer Ramani, may be a reference.

Additionally, as a government official, his status as a national leader makes the incident more sensitive.If Milei’s behavior is indeed informed and even deals with specific investors, then his behavior may be interpreted as an abuse of public power for market manipulation, which involves not only financial regulations, but may also touch on government integrity and ethics issues..

At present, whether the LIBRA incident really involves insider trading remains to be investigated.But from a market perspective, this incident has shown a “regulatory vacuum” in the crypto market: on the one hand, the remarks of celebrities and government officials can directly affect market sentiment, and even trigger a crazy influx of capital; on the other hand, the project party andRelevant stakeholders can use information asymmetry to conduct precise arbitrage, while ordinary investors take huge risks in high-volatility markets.

All this points to a bigger problem: if there is a lack of supervision, this situation may become the norm in the MEME currency market, so how will ordinary investors protect their rights?

Regulatory dilemma and investor response

In traditional financial markets, investors’ rights and interests are mainly protected by the Securities Law, market manipulation and insider trading regulations.However, in the current MEME currency market, these legal frameworks have obvious limitations:

MEME coins lack clear legal definitions.This makes it difficult for MEME currency trading to apply to existing securities regulations, and investors cannot seek legal relief through regulators like the securities market;
The responsible subject is vague.Especially in the LIBRA incident of the Argentine president, it is difficult to track the true identity of the arbitrageur due to the anonymity of the MEME currency market.Therefore, it is also difficult to investigate whether insider trading exists.In this case, even if investors suffer losses, it is difficult for them to hold specific entities accountable.
Lack of transparency and investor protection mechanisms.In the securities market, listed companies must disclose key information to investors, and the MEME currency market basically does not have any information disclosure obligations.Ordinary investors tend to chase highs driven by FOMO (fear of missing out), but by the time insider traders are found to evacuate, the market has collapsed.

In the speculative craze of the MEME currency market, the lack of effective supervision has made ordinary investors the ultimate risk bearer.So, how should investors protect their rights and interests when the legal framework has not yet fully covered the MEME currency market?

First, recognize the essence of the MEME currency market.The value of MEME coins is highly dependent on market sentiment and consensus on social media, rather than actual application value.Therefore, investing in MEME coins is more speculative than investment.Before entering the market, ordinary investors must make this clear and avoid blindly entering the market due to FOMO (fear of missing out) emotions.

Secondly, be cautious about celebrity tweets.Celebrity influence can indeed drive market growth in the short term, but this influence is often unsustainable.Once celebrities withdraw their remarks, market sentiment quickly reverses, eventually causing losses to a large number of investors.Therefore, blindly following the investment advice of celebrities is extremely risky.

Furthermore, stay away from insider trading traps.Insider trading in the MEME currency market is extremely common, and it is difficult for ordinary investors to compete with institutions or whales that are deploying in advance.Therefore, when it is found that a certain MEME currency has an abnormal surge in a short period of time and the information source is doubtful, it is best to remain cautious to avoid becoming a target of liquidity harvest.

Finally, focus on future regulatory trends.Although the MEME currency market is not strictly regulated at present, with the occurrence of similar CZ and Milei incidents, regulators in various countries are likely to strengthen regulations on the MEME currency market in the future.Therefore, investors should pay close attention to relevant legal trends in order to adjust their investment strategies in a timely manner.

Summary of Lawyer Mankun

The fanatical speculation in the MEME currency market can indeed create wealth myths in the short term, but the legal and investment risks hidden behind them cannot be ignored.The CZ incident and the Argentine President LIBRA incident once again verified this point – when regulation is absent and market sentiment is fueled by celebrities, ordinary investors often become victims of capital games.

In the current market environment, the only thing investors can do is to remain rational, not be confused by the illusion of short-term surges, improve risk awareness, and carefully evaluate investment targets.At the same time, we use on-chain data tracking, contract review and other tools to avoid insider trading and high-risk projects as much as possible and reduce the possibility of being harvested.

But it is foreseeable that with the continuous advancement of global regulation of virtual assets, the disorderly development of MEME coins will be difficult to maintain for a long time.When the fanaticism gradually cools down, what the market will ultimately face is: Should we continue to grow wildly, or move towards a more compliant future?

No matter the answer, the “shadow” of regulation may be quietly coming.