By Yusuf Olukokun

The Securities Exchange Commission (SEC) has warned Nigerians against investing in David Adeleke’s (Davido) meme coin because many coins of such lack fundamental value.

This statement was made public on the commission’s website on Friday, June 14 2024.

SEC implored Nigerians that are interested in meme coins should clearly understand the risks associated with it.

The statement read in part, “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.

“Please note that the commission does not recognise $Davido as an investment product or investable asset class under its regulatory purview, as such individuals who patronize it, do so at their peril.”

SEC furtherly advised that meme coins are curated by internet jokes, inspired by memes, and are also seen as being funny.

“Generally, 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.

“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.”

However, it should be recalled that Davido, the Nigerian music star, launched a meme coin known as $Davido on May 29, 2024.