The Nigerian Securities and Exchange Commission (SEC) has issued a warning to local investors about a meme coin linked to singer Davido. On June 14, the SEC used social media platform X to alert people about the risks of the $DAVIDO coin. The regulator described this coin as "highly risky" and advised that those investing in it do so at their own peril.

However, Imran Muhammad, a member of Nigeria's governing party, posted on X that the SEC had already warned residents about the dangers of meme coins. He also mentioned that the Commission had clarified that Davido’s coin was not under its regulatory jurisdiction.

Davido, whose full name is David Adedeji Adeleke, was recently accused of using his fame to promote a pump-and-dump scheme. The value of the DAVIDO token rose briefly but then dropped sharply just hours after Davido endorsed it.

Before the coin's collapse, Davido allegedly sold millions of the token, making over $450,000 in profit. This action drew condemnation from many Nigerians, including key figures in the crypto industry. They criticized Davido for scamming residents and his followers through cryptocurrency. In response to the backlash, the Nigerian SEC issued a statement explaining the nature of meme coins.

The SEC also advised capital market players to avoid associating with risky crypto assets like Davido’s meme coin. The Commission stated, "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 be distributed or monitored through any capital market mechanism."

The SEC also mentioned that it will keep an eye on developments in the crypto ecosystem and will take action if needed.