Nigerian Government has warned the citizens to stay away from investing in a cryptocurrency token associated with popular music artist David Adeleke, also known as Davido.
Recall that last month, Davido announced the launch of his own digital currency token, named “Timeless Davido” ($DAVIDO), which quickly gained traction among his fan base and supporters.
Partnering with blockchain platforms Phantom and Solana, the token initially surged in value, achieving a market capitalization of $10 million within just four hours and garnering attention on DEX Screener.
However, the excitement was short-lived as the token’s value plummeted recently, prompting a response from disgruntled investors. In a bid to reassure early adopters, Davido acknowledged their support and highlighted opportunities for some to win $100 through the Solana platform.
Despite these developments, the Securities and Exchange Commission (SEC) of Nigeria issued a cautionary statement on Friday, cautioning against investing in $DAVIDO and similar meme coins.
SEC clarified that meme coins, characterized by their origins in internet memes and social media promotion, do not possess fundamental value and are purely speculative in nature.
The commission also emphasized that such tokens are not intended to serve as mediums of exchange for goods and services, nor do they represent traditional investment products like shares, bonds, or derivatives.
Moreover, SEC reiterated that $DAVIDO does not fall under its regulatory purview as an approved investment product or asset class. Therefore, individuals who choose to engage with $DAVIDO or similar meme coins do so at their own risk.
Capital market operators were specifically warned against involving themselves with or promoting such tokens outside of SEC’s regulatory boundaries.
The commission affirmed its commitment to closely monitoring developments within the cryptocurrency ecosystem and pledged to use regulatory powers as necessary to safeguard investors and maintain market integrity.
