13.4 Million Altcoins Dead: How SEC Regulation Turned Crypto Into a Graveyard
Crypto analyst Alex Krüger says most tokens have failed by design, arguing that outdated regulation pushes tasks to launch belongings stripped of enforceable rights.
His feedback coincide with a interval of elevated token failures within the crypto market. Since 2021, over 13.4 million tokens have “died.”
Why So Many Altcoins Fail in Today’s Market
According to CoinGecko research, 53.2% of all cryptocurrencies listed on GeckoTerminal had failed as of the top of 2025. 11.6 million tokens collapsed in 2025, representing 86.3% of all failures recorded since 2021, signaling an unprecedented acceleration.
The variety of crypto tasks listed rose from about 428,000 in 2021 to twenty.2 million by 2025. This surge was met with escalating failures: simply 2,584 lifeless cash in 2021, rising to 213,075 in 2022, 245,049 in 2023, and 1.38 million in 2024. Yet, 2025’s collapse dwarfed all earlier years.
Certain niches skilled even higher failure rates. Music and video tokens failed at charges near 75%. Crypto analyst Krüger argued that outdated rules and token constructions fueled the disaster.
“Most tokens ever created are nugatory by design due to outdated rules,” he wrote.
In a detailed submit, Krüger argued that the SEC’s use of the Howey Test and enforcement-led oversight pushed crypto projects into a corner. For context, US regulators use the Howey Test to find out whether or not a transaction qualifies as an “funding contract” and subsequently a safety below federal securities legal guidelines.
A transaction is a security if it involves:
- an funding of cash,
- in a frequent enterprise,
- with an expectation of revenue,
- based mostly on the efforts of others.
If all 4 are met, US securities legal guidelines apply. To keep away from being classified as securities, groups systematically stripped tokens of all rights. The consequence, he mentioned, was an asset class outlined by hypothesis moderately than possession.
This design alternative had far-reaching penalties. When token holders haven’t any contractual rights, in addition they haven’t any authorized recourse. At the identical time, founders face no enforceable fiduciary duties towards the individuals funding their tasks.
In apply, this created an accountability vacuum. Teams may management giant treasuries with or abandon tasks fully, usually with out going through authorized or monetary penalties.
“In some other market, a mission providing zero rights and complete treasury opacity wouldn’t elevate a dime. In crypto, it was the one compliant method to launch. The result’s a decade of tokens designed to comfortable rug,” he added.
Disillusioned by VC-backed utility tokens, retail merchants turned to meme coins, which provided a clear lack of utility. As Krüger highlighted, this development elevated hypothesis and intense market behaviors.
“And this solely made the rot worse: memecoins are much more speculative and fewer clear, accelerating a shift towards predatory PVP buying and selling and zero-sum playing,” he remarked.
Krüger believes the solution is a new technology of tokens ruled by a stronger regulatory framework.
The submit 13.4 Million Altcoins Dead: How SEC Regulation Turned Crypto Into a Graveyard appeared first on BeInCrypto.
