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Posted By Admin On May 31st, 2024

One of Nigeria’s most prominent voices in the cryptocurrency space has come out against Afrobeats superstar Davido’s recent launch of the $Davido Meme Coin, accusing the musician of perpetrating an outright “crypto scam” that could severely damage the nation’s burgeoning crypto industry.

Rume Ophi, widely known as the ‘Cryptopreacher’ for his pioneering work in crypto education across Africa, did not mince words in his scathing critique of Davido’s meme token.

The coin, launched on May 29 on the Solana blockchain, saw a meteoric rise soon after its release, with its market capitalisation surging past $10 million within 24 hours as Davido’s 15 million social media followers piled in.

However, in the eight hours that followed, over 80% of that value was wiped out, with the meme coin’s market cap plummeting to just $2.1 million amidst a massive selloff. According to crypto data outlet DailyCoin, records show that Davido himself extracted a staggering $474,000 from the token during this period before cutting ties entirely.

According to Lookonchain, Davido created the token on May 29 using the popular memecoin launchpad Pump.fun. The singer received 7.5 SOL ($1,275) as start-up capital and spent 7 SOL ($1,190) to buy 203 million $DAVIDO (20.3% of the total supply.) 11 hours after creating the memecoin and promoting it on his X social account with 15.3 million followers, Davido offloaded 121.88 million $DAVIDO for 2,791 SOL, generating about $474,400 from the sale.

“If you bought the $DAVIDO meme coin expecting to cash out profits, I’m here to tell you that you were outright scammed by Davido himself. This is textbook behaviour for a crypto rug pull scam,” Rume Ophi, who is also a regular analyst on TV and other media platforms, warned.

Ophi argued that Davido’s quick exit from his own token launch, pocketing over $140,000 while leaving his fanbase holding the bag, constituted a brazen iteration of this scheme.

“One of the earliest, brightest red flags of any crypto scam is when the creators themselves are the first ones running for the exit after briefly pumping the price,” Ophi stated. “It’s a predatory cycle as old as snake oil – use hype to arouse investor FOMO, cash out huge while replacing fundamentals with empty promises, then leave the buyers holding a worthless asset.”

Beyond the financial damage to those who bought in, the Cryptopreacher expressed grave concerns about the potential reputational fallout that Davido’s actions could have on Nigeria’s crypto landscape. With the nation angling to become a continental leader in blockchain innovation, high-profile debacles like this could sow further distrust and regulatory hurdles.

“If it’s discovered that U.S. investors were impacted by this blatant attempt to issue unregistered securities, you can be certain the SEC’s crosshairs will be zeroing in on Davido,” Ophi warned. “And any resulting crackdown will create huge stress for the many legitimate businesses and startups operating in good faith across our crypto markets.”

He also criticised the Nigerian Securities and Exchange Commission (SEC) directly for failing to proactively protect citizens from such schemes, urging the regulator to establish clear policies and licencing for cryptocurrency projects looking to solicit investment from the public.

Rather than pursuing ill-conceived meme coins that Ophi derided as essentially ponzi schemes, the crypto educator implored Davido to realign his ambitions and leverage his stardom in more sustainable blockchain verticals like NFTs. This, Ophi argued, could drive real utility and value creation instead of inflicting widespread financial harm on legions of poorly-educated retail investors.

“With 15 million followers, many of whom have zero understanding of crypto basics, Davido’s actions are poised to result in very real, widespread financial damage,” stated Ophi. “He should be partnering with the SEC and our crypto community to focus on developing legitimate NFT products and services that contribute positively to this industry’s growth rather than detract from it.”

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