Financial professionals have expressed apprehension regarding Davido‘s recently introduced meme coin and cautioned about the possible hazards involved.
Within the financial community, the coin’s release has generated discussion.
Experts have drawn comparisons between MMM and other previous Ponzi schemes, in which millions of investors lost a significant sum of money.
According to analysts, these coins frequently profit off the fame of people who don’t have solid business principles or a well-defined company plan.
According to financial analyst Vincent Nwani, the Nigerian financial system would suffer if a coin like that was permitted to grow.
He said, “To begin with, I’m a huge fan of Davido, his music, and his family, and I will continue to enjoy his tremendous contribution to the Nigerian entertainment industry. Notwithstanding, the recently launched Davido coin is a bit overboard for me because of its semblance to various Ponzi schemes that we have contended with in this economy.”
He pointed out that the coin’s value proposition was mostly driven by Davido’s celebrity status and fan base.
“I say this for so many reasons. First, the workings of the coin seem to be conceived on the strength of Davido’s popularity, which he follows with a firm belief that the platform can successfully leverage his brand. If such a coin is allowed to thrive, what it does is that other popular personalities in Nigeria will quickly follow suit, and gross cases of abuse become inevitable. No doubt, this reality has a downside implication for the Nigerian financial system.
“The MMM experience remains so fresh in our minds. Three million Nigerians lost about N18bn to MMM, and this must not be allowed to happen again.”
The Security Exchange Commission has issued a warning to capital market operators not to associate with the meme currency, stating that it has not received regulatory approval.
Ambrose Omorodion, a different financial analyst, suggested that anyone without experience with finance stay away from bitcoin investments and said that the SEC would not prosecute the company if investors lost money.
“In the financial market, we need more products to fall into. However, meme coins are highly risky and I believe that is why the SEC came out to warn people that they are risky.
“Also, since cryptocurrency has emerged in the global space, I can see that people are now venturing into it, but my advice is that if they do not have the financial knowledge, they should not go into it or invest at all. The SEC will not sue the company if investors become victims,” he explained.
