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$Davido’s Meme Coins: SEC cautions Nigerians against investing in ‘highly risky’ instrument

Photo Collage of David Adeleke (Davido) and Meme Coins Platform Credit: Within Nigeria

*The Securities and Exchange Commission warns Capital market operators, and the public against investing in Meme Coins, including $Davido associated with David Adeleke, a Nigerian music star, known as Davido, stating the instruments are ‘highly risky, lack fundamental value, and are purely speculative’

Isola Moses | ConsumerConnect

Against the backdrop of avoidable risk, Nigeria’s Securities and Exchange Commission (SEC) has warned the general public against investing in the “Meme Coin” purportedly linked to Mr. David Adeleke, a music star popularly known as Davido.

SEC, in a recent statement posted on its Web site, cautioned that anyone who invests in the Meme Coins, does so at his/her peril.

The Capital market regulatory Commission stated: “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 also noted: “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.”

SEC further cautioned: “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.”

The Commission assured the investing public of keeping a close watch on market developments, and is ready to step in with regulatory action as needed.

The market regulator said: “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.”

It also explained: “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 is recalled Davido unveiled a Meme Coin christened $Davido Wednesday, May 29, 2024.

However, in reaction to the development, several Nigerians have widely criticised the Meme Coin after its value dropped just a day after its launch.

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