New York Department of Financial Services issues Meme Coin consumer alert, warning against "emotion-based virtual currencies"

The New York Department of Financial Services has issued a consumer alert warning against "sentiment-based virtual currencies," or meme coins, highlighting their extreme volatility, lack of regulation, and high risk of fraud, including "chive-cutting" schemes that suddenly pull up shipments. The department warns that these tokens are often controlled by a small group of insiders, created on unlicensed platforms, and are vulnerable to serious price manipulation.
The New York Department of Financial Services also said it has begun keeping a close eye on Meme Coins, where as part of a scam, Meme Coin creators or insiders may engage in manipulative "wash trades" that create the illusion that the price of market activity is rising. It is often difficult for the public to tell which Meme Coins are being manipulated, and consumers should be particularly wary of the recent proliferation of sentiment-based currencies created through unlicensed platforms that allow individuals without technical expertise to create currencies with just a few clicks. Even on regulated platforms, Meme Coins' price is volatile and unpredictable, and can drop significantly over a short period of time.