Cryptocurrency is a groundbreaking innovation in the financial world which has transformed how people think about money and transactions.
Cryptocurrencies such as Bitcoin and Ethereum have revolutionized the digital economy, driven by the quest for decentralized and secure forms of currency. This evolution has led to the emergence of various new coins over time.
However, the longevity of some of these coins is still being questioned.
Recently, the Nigeria Securities and Exchange Commission (SEC) warned potential investors to avoid $Davido’s coin linked to Nigerian popular singer, David Adeleke popularly called Davido stating that investing in the coin was risky because the meme coins lack fundamental value and are purely speculative.
A statement by SEC management on Friday indicates that the commission does not recognise the coin.
The statement reads: “The attention of the Securities and Exchange Commission, Nigeria (“SEC”) has been drawn to a meme coin known as “$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 the SEC, meme coins are not intended to function as a medium of exchange accepted by the public for payment of goods and services. Additionally, they are not considered digital representations of capital market products such as shares, debentures, units of collective investment schemes, derivatives contracts, commodities, or other financial instruments or investments.
“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,” it warned.
Recall that 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.
Meanwhile, the Commission has emphasized that it does not recognize $Davido as an investment product or investable asset class within its regulatory scope. Therefore, individuals who choose to invest in it do so at their own risk.
