The Federal Government has cautioned her citizens against investing in the crypto token associated with music star David Adeleke, popularly known as Davido.
Recall that last month, the singer unveiled a crypto token or memecoin named “Timeless Davido” ($DAVIDO), generating excitement among his fans and followers.
Davido collaborated with major blockchain platforms Phantom and Solana to develop the token.
Initially, $DAVIDO saw a rapid rise, reaching a market cap of $10 million within four hours and gaining traction on DEX Screener.
However, this surge was short-lived as the coin’s value soon declined.
Following criticism from numerous X users, Davido welcomed early $DAVIDO community members, mentioning that some participants won $100 via the Solana platform.
On the 14th of June, 2024, the Securities and Exchange Commission (SEC) issued a statement warning the public about the high risks of investing in the meme coin.
The commission emphasized that it does not recognize $DAVIDO as an investment product or investable asset under its regulatory framework.
The statement read, “The attention of the Securities and Exchange Commission, Nigeria (SEC) has been drawn to a meme coin known as ‘$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 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.”