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SEC warns Nigerians against high risk of investing in $Davido’s coin

THE Nigeria Securities and Exchange Commission (SEC) has warned potential investors to avoid $Davido’s coin linked to Nigerian popular singer, David Adeleke popularly called Davido.

The SEC said investing in $Davido’s coin was risky because the meme coins lack fundamental value and are purely speculative.

A statement by SEC management on Friday, June 14 said it does not recognise the coin.

The statement reads: “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 popularly known as  Davido.

“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.

According to SEC, 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 commission warned the general public 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 outside the SEC’s regulatory purview. Such instruments should not be distributed or monitored through any capital market mechanism,” SEC warned further.

The Commission further stressed that it 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.

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“The Commission will continue to monitor developments within the ecosystem and will not relent in deploying its regulatory powers as and when required,” it stated.




     

     

    The $Davido token was launched on the Solana blockchain and was created using the popular Platform Pump Fun, which allows crypto users to create a token in a matter of minutes.

    Crypto research tool Lookonchain reported that Davido received 7.5 SOL worth $1,275 as startup capital, which he used to create the $Davido token.

    Despite the excitement and the rave created online by the launch of the $Davido tokens, the party was short-lived as the meme coin lost over 93 per cent of its value by the next day.

    The SEC also called on the members of the public are to note that by virtue of the provisions of Section 38(1) of the Investments and Securities Act (ISA) 2007, only persons registered with the Commission can engage in capital market activities, thus making the actions of these entities listed above unlawful.

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    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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