Nigerian Regulator Warns Against Investing in Meme Coin Linked to Davido

The Nigerian securities regulator warned residents against investing in a meme coin linked to singer and celebrity Davido. The regulator described the meme coin as a highly risky investment, saying investors who invest in it do so at their own risk. The Commission will continue to monitor the ecosystem and will exercise its authority if necessary.

SEC Warns Davido’s Meme Coin is Highly Risky

The Nigerian Securities and Exchange Commission (SEC) warned local investors against participating in or investing in a meme coin linked to singer and celebrity Davido. In an investment alert issued on June 14 via the social media platform X, the regulator described the coin, known as $DAVIDO, as “highly risky” and cautioned that individuals who invest in it do so at their own risk.

Before the SEC’s alert, Imran Muhammad, a member of the Nigerian governing party, claimed in a post on X that the Commission had warned residents about the risks associated with meme coins. Muhammad also revealed that the SEC had clarified that Davido’s meme coin fell outside its regulatory scope.

As reported by Bitcoin.com News, Davido, whose real name is David Adedeji Adeleke, was recently accused of using his influence to promote a pump-and-dump scheme. After a brief surge, the DAVIDO token’s value plummeted mere hours after Davido publicly endorsed it.

Davido Accused of Scamming Residents, Investors

However, before the meme coin’s collapse, Davido reportedly sold millions of the meme coin, profiting over $450,000. Many Nigerians, including prominent crypto industry players, condemned Davido for using cryptocurrency to scam residents and his followers. Following the public outcry, the Nigerian SEC has released a statement explaining the origins of meme coins.

The Commission, however, warned capital market players against associating with risky crypto assets like Davido’s meme coin.

“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,” the SEC said.

Meanwhile, the Commission said it will continue to monitor developments in the ecosystem and will not hesitate to exercise its authority if necessary.

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