UAE to Investigate Cardi B-Backed $WAP Token
The United Arab Emirates' (UAE) Securities and Commodities Authority (SCA) has initiated an investigation into potential securities violations related to the cryptocurrency $WAP, a token built on the Solana blockchain and prominently endorsed by celebrities such as Cardi B.
🚨 LATEST: 🇦🇪UAE Securities Authority addresses complaint by @syedsameer over alleged securities violations tied to solana-based token $WAP, citing insider promotions and undisclosed deals.
($WAP, launched by celebrity @iamcardib, was promoted by several KOLs on @solana) pic.twitter.com/j3jJMhHnpB
— SolanaFloor (@SolanaFloor) October 14, 2024
This inquiry follows a formal complaint from a notable Dubai-based venture capital firm and local Emirati investors, who have raised allegations of market manipulation and fraud connected to the promotion and trading of $WAP.
$WAP Token Investigated for Market Manipulations
The UAE SCA has launched an investigation into potential securities law violations linked to the cryptocurrency $WAP, endorsed by Cardi B.
This inquiry follows concerns that a crypto wallet address shared by the rapper during her promotional efforts was associated with a notorious scammer.
I'll be sharing what I can as our investigation moves along and we're allowed to reveal more evidence / details of the $WAP cabal over the coming days as the case builds up:
1. Here we have a bunch of ETH wallets of @The__Solstice where he keeps bundled supply in (we're not…
— Syed Sameer (@syedsameer) October 15, 2024
Cardi B's promotional message on her official X account showcased $WAP, a cat-themed meme coin inspired by her hit song, featuring an animated cat mascot alongside the contentious wallet address.
Ready to show off $WAP pic.twitter.com/Bi12ci4nxR
— $WAP (@wapwtf) October 14, 2024
Crypto security analysts have flagged this address as belonging to an individual previously tied to fraudulent activities in the cryptocurrency space, raising alarms about the risks posed to investors by such endorsements.
The investigation is focused on allegations that the $WAP token was part of a "pump and dump" scheme, where promotional tactics by key opinion leaders and insiders allegedly manipulated the token's value on social media platforms.
Reports suggest that a network of influencers was compensated with substantial amounts of $WAP tokens to promote the cryptocurrency, which led to artificial price inflation.
Analytics firm Bubblemaps indicated that coordinated supply bundling and strategic sales allowed insiders to profit at the expense of retail investors.
$WAP is heavily bundled
They used intermediary addresses to hide from Bubblemaps. Here’s the map with those addresses included
Our V2 solves this (coming soon)https://t.co/OW4Sbr48p4 pic.twitter.com/GySQI13Mav
— Bubblemaps (@bubblemaps) October 12, 2024
The SCA's findings indicate that promoters and traders of $WAP have violated various UAE and US securities laws related to market manipulation and the non-disclosure of financial interests.
These violations carry severe penalties, including hefty fines, trading bans, and potential criminal charges for those involved.
The complexity of the case is heightened by the involvement of high-profile influencers like Cardi B, as celebrity endorsements often lead to rapid price increases, making manipulative practices challenging for regulators to detect in real time.
In response to the investigation, the SCA has reached out to X for information regarding accounts promoting $WAP and is seeking collaboration with US regulatory bodies, such as the SEC, to ensure a thorough examination of the allegations.
Is Celebrity-Driven Crypto Advertisement Fuelling Fraud?
The investigation into $WAP highlights ongoing concerns about regulation in the cryptocurrency market.
High-profile figures like Cardi B and social media influencers frequently promote tokens, creating opportunities for hype that can lead to market momentum—making these assets susceptible to pump-and-dump schemes.
Such schemes not only harm individual investors but also undermine public trust in digital currencies.
We should not allow celeb cabal tokens to pump and dump on us and create a bad name for Solana and memecoins in general. This isn't a "fed" move this is a good move if we really want mainstream adoption.
— Syed Sameer (@syedsameer) October 14, 2024
This case signals a potential shift towards stricter regulations governing the promotion of cryptocurrencies by public figures.
It raises critical questions about the responsibilities of social media platforms in allowing the dissemination of promotions that may have fraudulent intent.
As the SCA and other regulatory bodies delve deeper into the matter, the possibility of enhanced regulations aimed at safeguarding market integrity becomes increasingly likely.
This investigation could set a precedent for future cases involving celebrity endorsements of cryptocurrencies, potentially leading to heightened scrutiny and caution among influencers regarding their promotional activities.
