The Securities and Exchange Commission (SEC) has warned the public against investing in the meme coin allegedly linked to the popular Nigerian music star, David Adeleke, popularly known as Davido.
SEC, who sent out the warning in a statement posted on their website on Friday, said anyone who patronises the meme coin, do so at their own risk.
“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,” the statement read.
“Capital market operators are by this notice warned 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 recognise $Davido as an investment product or investable asset class under its regulatory purview, as such individuals who patronize it, do so at their peril.”
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SEC explained that generally, meme coins are cryptocurrencies inspired by memes and internet jokes. It said 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.”
On Wednesday, May 29, 2024, Davido unveiled a meme coin called $Davido on Wednesday, May 29, 2024. The meme coin was criticised by Nigerians after its value crashed just a day after its launch.
Frustrated investors then took to social media to express their anger as the coin’s value plummeted.
