The Securities and Exchange Commission, Nigeria (SEC), in an investor alert released today, June 14, 2024, has advised the general public that investing in meme coins is highly risky and should be done with a full understanding of the associated risk, as meme coins lack fundamental value and are purely speculative. This came against the popularity of a meme coin linked to a popular Nigerian.
According to SEC, “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. It is important to note that the meme coins are 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.”
The capital market regulator, thus, warned market operators not to associate with instruments that fall outside the SEC’s regulatory purview as such instruments should not in any manner be distributed or monitored through any capital market mechanism.
The alert disclosed that the Commission does not recognise meme coin as an investment product or investable asset class under its regulatory purview, as individuals who patronize it do so at their peril.
The Commission stated that it will continue to monitor developments within the ecosystem and not relent in deploying its regulatory powers as and when required.
