The Securities and Exchange Commission (SEC) has issued a cautionary statement to investors regarding the high risks associated with investing in meme coins, specifically mentioning $Davido.
In a circular dated June 14, 2024, the SEC highlighted that meme coins, such as $Davido, are highly speculative and lack fundamental value. These cryptocurrencies, inspired by internet memes and jokes, are often promoted through social media and celebrity endorsements.
The SEC clarified that meme coins are not intended to serve as a medium of exchange or as digital representations of capital market products. The Commission urged the public to exercise caution and thoroughly understand the risks before investing in such assets.
Furthermore, the SEC advised capital market operators to avoid associating with instruments that fall outside the Commission’s regulatory scope. It emphasized that $Davido is not recognized as an investment product or asset class under its regulatory framework, and individuals who invest in it do so at their own risk.
“The Commission will continue to monitor developments in the ecosystem and deploy its regulatory powers as needed,” the SEC stated.
