SEC issues warning on Afrobeats star Davido-linked meme coin
TLDR
- Nigeria SEC warns public about risks of meme coins, specifically $DAVIDO linked to Davido.
- Investing in meme coins deemed highly risky due to lack of fundamental value and speculative nature.
- SEC does not recognize $DAVIDO as investment product or investable asset class, cautioning individuals to invest at own risk.
The Nigeria Securities and Exchange Commission (SEC) has issued a notice warning the public about the risks associated with meme coins, including $DAVIDO, a meme coin linked to Nigerian singer David Adedeji Adeleke, known as Davido.
The SEC stated that investing in meme coins is highly risky and should only be undertaken with a full understanding of the associated risks. It emphasized that meme coins lack fundamental value and are speculative.
The regulator also clarified that it does not recognize $DAVIDO as an investment product or investable asset class under its regulatory framework, advising that individuals who invest in it do so at their own risk.
Key Takeaways
The $DAVIDO meme token was launched in late May 2024 and reportedly generated a profit of 2,783 $SOL ($473,000) within 11 hours, as per Lookonchain, an on-chain analytics platform. Lookonchain also noted an unrealized profit of $207,000 for the memecoin. According to the platform, Davido initiated $DAVIDO with 7.5 $SOL ($1,275) as initial capital, created the token, and used 7 $SOL ($1,190) to purchase 203 million $DAVIDO tokens (20.3% of total supply). As of May 30, 2024, Lookonchain reported that Davido had sold 121.88 million $DAVIDO tokens for 2,791 $SOL ($474,000). However, the sharp decline in value following its launch has led to criticism and raised concerns in the market and among fans, questioning the legitimacy of the token and whether it could be a scam.
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