By Ihechi Enyinnaya
The Securities and Exchange Commission (SEC) has cautioned Nigerians against investing in $Davido cryptocurrency, labeling it as high risk. The commission highlighted significant financial dangers associated with this digital asset.
Nigerian music star Davido recently introduced $Davido, a cryptocurrency developed in partnership with Phantom and Solana. Although it initially attracted considerable interest and yielded profits for early investors, the coin soon experienced a sharp decline in value, leading to substantial losses for many.
In response, the SEC issued a statement clarifying that $Davido is not regulated as an investment product or a recognized asset class. The commission warned that those investing in this meme coin do so at their own risk.
“The attention of the Securities and Exchange Commission, Nigeria (‘SEC’) has been drawn to a meme coin known as ‘$Davido,’ allegedly linked to the popular Nigerian singer, David Adedeji Adeleke AKA Davido,” the statement read.
“Generally, meme coins are cryptocurrencies inspired by memes and internet jokes. They are often seen as fun, light-hearted currencies promoted via social media communities and sometimes celebrity endorsements.
“Meme coins are NOT designed to be a medium of exchange for goods and services, nor do they represent capital market products such as shares, debentures, units of collective investment schemes, derivatives contracts, commodities, or other financial instruments or investments.
“The public is hereby advised that meme coins lack fundamental value and are purely speculative. Investing in meme coins, including $Davido, is highly risky and should only be done with a full understanding of the associated risks.
“Capital Market Operators are warned not to associate with instruments outside the SEC’s regulatory purview. Such instruments should not be distributed or monitored through any capital market mechanism.
“The Commission does not recognize $Davido as an investment product or investable asset class under its regulation. Individuals who invest in it do so at their peril.
“The SEC will continue to monitor developments within the ecosystem and will deploy its regulatory powers as necessary.”