The Federal Government has issued a caution to Nigerians advising them to avoid investing in the cryptocurrency token associated with music sensation, Davido.
Last month, Davido introduced a new cryptocurrency token or memecoin that draws inspiration from himself.
In a statement released on Friday, the Securities and Exchange Commission (SEC) cautioned the public about the significant risks associated with investing in meme coins.
The commission clarified that it does not consider $Davido to fall within its regulatory scope as an investment product or investable asset class.
“The attention of the Securities and Exchange Commission, Nigeria (“SEC”) has been drawn to a meme coin known as “$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 recognise $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.”
