The Securities and Exchange Commission (SEC) has sounded a public warning against investing in a meme coin believed to be owned popular Nigerian singer, David Adedeji Adeleke, known as Davido.
In a statement posted on the commission’s website on Friday, the SEC cautioned that investing in the meme coin, including $Davido, is highly risky and should be approached with full awareness of the associated risks.
“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 read.
The regulator commission also warned capital market operators to avoid associating with instruments outside the commission’s regulatory purview, stressing that such instruments should not be distributed or monitored through any capital market mechanism.
“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 SEC stated.
The commission assured the public that it will continue to monitor market developments and is prepared to take regulatory action as necessary.
The SEC further explained that meme coins are cryptocurrencies inspired by memes and internet jokes, often promoted through social media communities and sometimes through celebrity endorsements.
They are not intended to serve as a medium of exchange for goods and services or as a digital representation of traditional capital market products.
According to Punch Online, Davido launched his meme coin, $Davido, on May 29, 2024.
However, the coin faced widespread criticism after its value plummeted just a day after its launch, leaving many investors and fans frustrated and disillusioned.
Social media was flooded with complaints from disappointed investors expressing their dismay at the sudden drop in the coin’s value.
