JUST IN: Investing in Davido’s meme coin is ‘highly risky’, SEC warns

The Securities and Exchange Commission (SEC) has issued a warning to the public about the high risks associated with investing in Davido’s newly launched cryptocurrency, $Davido.

Two weeks ago, the popular Nigerian artist introduced $Davido, a meme coin, in collaboration with Phantom and Solana.

The cryptocurrency quickly attracted attention and generated profits for early investors.

However, the coin experienced a rapid crash soon after, leading to significant losses for many who had invested in it.

This prompted a backlash on social media, with some users accusing the singer of orchestrating a scam.

In response to the situation, the SEC released a statement cautioning investors about the dangers of investing in the meme coin.

The commission clarified that it does not recognise $Davido as a legitimate investment product or investable asset class under its regulatory framework.

The statement, shared on Friday, emphasised that those who choose to invest in the coin do so at their own risk.

“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.

Generally, meme coins are cryptocurrencies inspired by memes and internet jokes. They are often envisaged as a 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 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 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 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,” the statement read.

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