The Securities and Exchange Commission, Nigeria, SEC, on Friday warned Nigerians against investing in Meme Coins, known as “$Davido”, allegedly linked to popular Nigerian singer David Adeleke, known as Davido.
In a statement on its website, SEC said that it does not recognise $Davido as an investment product or investable asset class under its regulatory purview.
The regulator noted that, consequently, individuals who invest in it do so at their own risk.
“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,” it said.
According to SEC, meme coins are 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.
The commission listed such capital market products as: shares, debentures, units of collective investment schemes, derivatives contracts, commodities or other kinds of financial instruments or investments.
The regulator said: “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.
SEC stated it would continue to monitor developments within the ecosystem and would not hesitate to deploy its regulatory powers as needed.