Nigeria’s capital market regulator, Security and Exchange Commission (SEC) has warned against investing in $Davido meme coin or any other kind of meme coin in the country, highlighting that doing otherwise was at the investor’s risk.
Popular Nigerian singer, David Adeleke, a.k.a Davido, recently ventured into cryptocurrency in May, partnering with Phantom and Solana to launch $DAVIDO, whose market value surged past $10, and ranked number one on the DEX screener within 24 hours after its launch.
In an official statement released by SEC on Friday, the commission disclosed that its attention has been drawn to $Davido meme coin which is “allegedly linked to the popular Nigerian singer, David Adedeji Adeleke AKA Davido”.
The SEC emphasised that meme coins lack fundamental values and are highly speculative.
The commission warned that meme coins have no capital representations and is not intended to serve as a medium of exchange, pointing out that it does not fall within the SEC’s regulatory purview.
“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”, SEC stated.
SEC highlighted that meme coins were highly risky investments and patronising them was purely at an individual’s peril. It warned that investing in meme coins, including $Davido, was highly risky and should be done with a full understanding of the associated 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 patronise it, do so at their peril”, SEC said.
Regarding necessary moves to minimise the plague of meme coins in the country, the SEC also promised to monitor developments within the ecosystem, adding that the commission will not relent in deploying its regulatory powers as and when required.
