Davido has not responded to criticism regarding concerns over pump-and-dump schemes and regulatory scrutiny surrounding his newly launched meme token, DAVIDO. The Nigerian crypto community has been vocal about their disapproval of how the Afro-pop star’s team is managing the token.
Many fear that a significant sell-off of the token could be part of Davido’s strategy. According to Lookonchain, Davido made a substantial profit of 2,783 SOL ($473,000) within just 11 hours by selling his DAVIDO memecoin after its launch on May 29. As of now, he still holds an unrealized profit of $207,000.
Davido’s DAVIDO Token Launch Raises Concerns
Davido received an initial investment of 7.5 SOL (equivalent to $1,275) and used 7 SOL ($1,190) to create and launch his DAVIDO token on the pump.fun platform. This allowed him to acquire 203 million DAVIDO tokens, which represent 20.3% of the total token supply.
Despite launching DAVIDO, Davido has remained silent amid widespread criticism from his fans and the crypto community. Concerns have been raised over his actions, including transferring 20 million DAVIDO tokens to an address and selling 61.12 million tokens (worth $207,000). Critics argue that these actions, coupled with Davido’s promotion of the token, suggest potential pump-and-dump tactics.
Rume Ophi, a local crypto expert, suggested that Davido could have used his influence more responsibly by advocating for regulatory clarity and proper licensing within Nigeria’s crypto sector, rather than launching his own token. Ophi warned that Davido’s memecoin risks damaging the industry’s reputation and attracting scrutiny from regulatory bodies like the SEC.
Some in the crypto community expressed disappointment, believing Davido and his team could have managed the token launch more strategically to avoid perceptions of opportunism. They argued that a more thoughtful approach could have benefited both Davido and his supporters in the long run.
Controversy Surrounding Davido’s Crypto Activities
Following the launch of his DAVIDO token, Davido faced criticism for quickly selling a substantial amount of the tokens, totaling nearly $500,000. Critics, including users on X platform like @Toobbss, accused Davido of repeating a pattern where he sells digital coins shortly after promoting them, leaving his followers to face potential financial losses. This recent incident with DAVIDO marks the second such instance in the past three years, following a similar controversy involving RapDoge in 2021.
Davido’s involvement in the cryptocurrency space coincides with a trend of celebrity-backed meme tokens gaining popularity. Celebrities like Iggy Azalea, who introduced her token MOTHER, have also entered the fray. However, these launches have stirred controversy due to concerns about potential pump-and-dump schemes. Such schemes can leave investors vulnerable to sudden price drops and financial losses.
The volatile nature of celebrity-backed tokens poses risks for investors, particularly those who may not be familiar with cryptocurrency markets. These incidents also attract regulatory scrutiny, as authorities seek to protect investors from fraudulent activities and ensure transparency in token launches.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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