The public has been cautioned by the Securities and Exchange Commission (SEC) not to invest in the meme coin that is purportedly associated with popular Nigerian artist David Adedeji Adeleke, better known by his stage name Davido.
The commission made this known in a statement published on its website on Friday.
The SEC issued a warning, saying that users of 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.
“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,” the statement read.
The SEC said it will keep a close watch on market developments and is ready to step in with regulatory action as needed.
The commission further explained, “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 music star unveiled a meme coin called $Davido on Wednesday, May 29, 2024.
However, the meme coin has been widely criticised by Nigerians after its value nosedived just a day after its launch.
Social media was awash with disappointed investors and fans venting their frustration as the coin’s value plummeted, with many expressing their dismay and disillusionment.
