The Securities and Exchange Commission (SEC) has warned the public that “investing in Davido‘s meme coin is highly risky.”
A fortnight ago, the ‘Unavailable’ hitmaker launched $Davido, his new cryptocurrency coin, in a partnership involving Phantom and Solana.
The coin quickly gained popularity and even earned profits for early investors.
However, it crashed shortly after, with many people who invested in it reporting losses. Some social media users also called out the singer for an alleged scam.
Reacting to the development in a statement, the commission disclosed that it does not recognize $Davido as an investment product or investable asset class under its regulatory purview.
In the statement shared on Friday, SEC also warned that anyone who “patronizes the meme coin, do so at their own peril”.
“The attention of the Securities and Exchange Commission, Nigeria (“SEC”) has been drawn to a meme coin known as “$Davido” allegedly linked to the popular Nigerian singer, David Adedeji Adeleke AKA Davido,” the statement reads.
“Generally, meme coins are cryptocurrencies inspired by memes and internet jokes. They are often envisaged as fun, light-hearted cryptocurrencies promoted through a social media community and sometimes through celebrity endorsements.
“Meme coins are also not intended to serve as a medium of exchange accepted by the public as payment for goods and services or as a digital representation of capital market products such as shares, debentures, units of collective investment schemes, derivatives contracts, commodities, or other kinds of financial instruments or investments.
“The general public is hereby advised that meme coins lack fundamental value and are purely speculative. The general public is further warned that investing in meme coins, including $Davido, is highly risky and should be done with a full understanding of the associated risk.
“Capital Market Operators are warned by this Notice not to associate with instruments that fall outside the SEC’s regulatory purview. Such instruments should not, in any manner, be distributed or monitored through any capital market mechanism.
“PLEASE NOTE that the Commission does not recognize $Davido as an investment product or investable asset class under its regulatory purview, as such individuals who patronize it, do so at their peril.
“The Commission will continue to monitor developments within the ecosystem and will not relent in deploying its regulatory powers as and when required.”
