The Securities and Exchange Commission (SEC) has warned the public that “investing in Davido‘s meme coin is highly risky”.
A fortnight ago, the ‘Unavailable’ hitmaker launched
$Davido, his new cryptocurrency coin in a partnership involving Phantom and
Solana.
The coin quickly gained popularity and even earned profits
for early investors.
However, it crashed shortly after with many people who
invested in it reporting losses. Some social media users also called out the
singer for an alleged scam.
Reacting to the development in a statement, the commission disclosed that it does not recognize $Davido as an investment product or investable asset class under its regulatory purview.
In the statement shared on Friday, SEC also warned that
anyone who “patronizes the meme coin, do so at their peril”.
“The attention of the Securities and Exchange Commission,
Nigeria (“SEC”) has been drawn to a meme coin known as “$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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I don't think anybody needs any warning for this
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