June 14, 2024

‘Highly risky’, SEC warns Nigerians investing in $Davido coin

‘Highly risky’, SEC warns Nigerians investing in $Davido coin

The Securities and Exchange Commission (SEC) has issued a public warning regarding the risks associated with investing in Davido’s cryptocurrency, $Davido.

The commission cautioned that the digital asset poses significant financial risks to investors.

Recently, Nigerian music star Davido launched $Davido, a new cryptocurrency coin, in collaboration with Phantom and Solana.

The coin gained rapid popularity initially, attracting early investors who reportedly made profits.

However, shortly after its launch, $Davido experienced a sharp decline in value, resulting in substantial losses for many investors.

Responding to these developments, the SEC released a statement asserting that $Davido does not fall under its regulatory oversight as an investment product or a recognized asset class.

The commission emphasized that individuals who choose to invest in the 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 reads.

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

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