The Securities and Exchange Commission has urged the public not to invest in the meme coin reportedly tied to prominent Nigerian artist David Adedeji Adeleke, also known as Davido.
On Friday, the commission’s website published a statement containing this information.
The SEC advised that anyone who uses the meme coin does so at their peril.
“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 stated that it will closely monitor market developments and is prepared to take regulatory action as appropriate.
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.”
It should be noted that the singer debuted a meme coin named $Davido on Wednesday, May 29, 2024.
However, the meme coin was severely condemned by Nigerians when its value plummeted barely a day after its inception.
