The Nigerian Securities and Exchange Commission (SEC) has issued a stark warning against the $Davido meme coin, labelling it an internet joke with no real value. In a statement released on Friday, the commission cautioned potential investors about the high risks involved in putting money into the coin associated with Nigerian afrobeat singer, David Adedeji Adeleke, popularly known as Davido.
The SEC’s announcement came after the Grammy-nominated artist promoted and subsequently deleted posts about the $Davido coin on his social media. Davido had introduced the meme coin on May 30, in collaboration with Phantom and Solana, but faced backlash from fans and investors as the coin quickly lost its value.
The SEC stated, “Meme coins are cryptocurrencies inspired by memes and internet jokes. 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.”
The commission stressed that the $Davido coin is not recognized as an investment asset. “The Commission does not recognise $Davido as an investment product or investable asset class under its regulatory purview. Individuals who patronise it, do so at their peril,” the SEC warned.
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Highlighting the speculative nature of meme coins, the SEC clarified, “Generally, meme coins lack fundamental value and are purely speculative. Investing in meme coins, including $Davido, is highly risky and should be done with a full understanding of the associated risk.”
The commission also advised capital market operators to stay away from financial instruments that do not fall under the commission’s regulation. “Capital market operators are advised not to associate with instruments that fall outside the SEC’s regulatory purview,” the statement added.
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