The Securities and Exchange Commission (SEC) of Nigeria warns the public about the high risks associated with investing in the $Davido meme coin, linked to the popular Nigerian artist Davido.

The SEC highlighted that meme coins are highly speculative and lack inherent value. These digital assets, typically inspired by internet memes and jokes, are marketed as entertaining and light-hearted investments through social media and celebrity endorsements. Despite their promotion, they are not intended to function or replace legitimate mediums of exchange or represent traditional financial instruments like stocks or bonds.

On May 29, 2024, Nigerian artist Davido launched a $Davido meme coin. The coin received attention after being retweeted and tagged by Phantom Wallet and popular crypto trader Ansem. Initially, $Davido achieved a high market capitalization. However, the excitement was short-lived as the coin's value rapidly plummeted.

This sharp decline led to allegations of a potential rug pull. The crypto community and Davido's fans criticized and accused Davido of exploiting his fans for personal gain. It was reported that Davido "made a profit of $473k within 11 hours of the coin's launch. He had initially received 7.5 SOL as start-up capital and spent 7 SOL to buy 203 million $Davido tokens. He then sold a 121.88M $DAVIDO for 2,791 $SOL($474.4K)." _lookonchain

Nigeria SEC cautioned the general public against investing in these volatile assets, warning that meme coins are fraught with risks and should only be purchased with a full understanding of the potential for significant financial loss. Additionally, the SEC reiterated its dedication to overseeing the cryptocurrency ecosystem stating that it will continue to use its regulatory authority as needed to safeguard investors and ensure market integrity.