SEC Warns Investing in Meme Coins, Including $Davido, Is Highly Risky

The Securities and Exchange Commission, Nigeria (SEC), on Friday warned that investing in meme coins, including $Davido, is highly risky and should be done with a full understanding of the associated risk.

The Securities and Exchange Commission, Nigeria (SEC) has warned against investing in meme coins, including $Davido, without fully understanding the risks involved.

In a circular dated June 14, 2024, the commission stated that it does not recognize $Davido as an investment product or investable asset class under its regulatory ambit.

Individuals who patronize it do so at their own risk, and capital market operators are directed “not to associate with instruments that fall outside the SEC’s regulatory purview.”

Such instruments, it continued, “should not in any manner be distributed or monitored through any capital market mechanism.”

The commission noted that its attention “has been drawn to a meme coin known as “$Davido” allegedly linked to the popular Nigerian singer, David Adedeji Adeleke AKA Davido.”

Generally, the commission explained, “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.”

The SEC further stated that 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 a 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.

News source：https://www.kdj.com/cryptocurrencies-news/articles/warns-investing-meme-coins-including-davido-highly-risky.html

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