UAE Requests Investigation Into Cardi B’s WAP Meme Coin

The Securities and Commodities Authority of the United Arab Emirates has launched an investigation into alleged securities violations involving the cryptocurrency $WAP, a Solana blockchain-based token closely promoted by high-profile celebrities like Cardi B.

The probe got here within the wake of a proper grievance from a distinguished Dubai-based VC agency and native Emirati buyers.

It accused market manipulation and fraud in regards to the promotion and buying and selling of $WAP.

Cardi B’s Crypto Endorsement Beneath UAE Investigation

The UAE Securities and Commodities Authority opened an investigation into potential securities legislation violations involving the Cardi B-endorsed cryptocurrency $WAP.

The crypto pockets tackle rapper Cardi B shared whereas shilling WAP tokens that reportedly belonged to a well-known crypto scammer.

Cardi B posted to her official X account a promotional message touting WAP. WAP is a cat-themed meme coin that co-opts the identify of the rapper’s hit music. Message included a video of WAP’s mascot – an animated cat – alongside a pockets tackle. Crypto safety analysts have recognized the tackle as a determine tied to prior nefarious exercise within the cryptocurrency market. This has raised issues concerning the endorsement and potential danger to buyers.

The investigation has revolved round fees that the $WAP token was a part of a “pump and dump” scheme. In response to the SCA, the token was manipulated by promotional actions by means of key opinion leaders and insiders. They have been allegedly paid to pump up the cryptocurrency on totally different social platforms. These sort of wrongdoings aren’t new. Lately, the Federal Bureau of Investigation has performed an enormous thoughts recreation by launching a fake crypto token referred to as NexFundAI to reveal large-scale crypto pump-and-dump scheme.

In response to stories, promotional actions included a community of influencers who, in flip, acquired hefty chunks of the $WAP token at no cost.

Analytics agency Bubblemaps steered that, on this case, heavy bundling of provide and strategic gross sales drove the token’s worth up earlier than the insiders offloaded their stock on the lack of retail buyers.

A number of social media accounts have been reportedly concerned within the scheme, in keeping with an investigation that alleged coordination had been in place to affect or manipulate the market valuation of the token.

UAE Probes Crypto Token Promotion: Potential Securities Violations

Particularly, the outcomes of SCA establish that promoters and merchants of $WAP have violated varied provisions of the UAE and US securities legal guidelines associated to market manipulation and non-disclosure of economic curiosity. These violations can lead to extreme punishment, together with heavy fines, a ban on buying and selling, and even prison fees in opposition to the perpetrators if confirmed.

UAE is, however, very crypto pleasant. Only recently, OKX announced that it formally launched its buying and selling platform within the United Arab Emirates to all retail and institutional buyers after buying a full working license.

Cardi B and different influencers’ involvement have made this investigation that rather more complicated. Within the cryptocurrency market, it’s not unusual for tokens that celebs endorse to quickly enhance in worth. This gives room for manipulative practices which may be onerous for regulators to uncover in actual time.

Furthering the investigation, the SCA has written to X for data regarding accounts selling $WAP. It’s now calling on the cooperation of US regulatory our bodies such because the SEC to make sure an in-depth investigation of the allegations.

A Case for Tighter Oversight

The probe into $WAP underlines some persistent areas of concern in cryptocurrency market regulation. Celebrities resembling Cardi B and social media influencers usually shill tokens. Tokens can simply be overrated and collect market momentum, which could additionally make them simple targets for pump-and-dump schemes. Moreover hurting particular person buyers, such schemes scale back public belief in digital property.

This case thus offers a robust sign for growing regulatoins relating to the social promotion of cryptocurrencies by public figures.

It raises questions concerning the duties of social media platforms about proliferating the product promotion with fraudulent intent. Because the SCA and different regulators dig deeper, elevated regulation of cryptocurrency markets to guard market integrity could also be close to.

This case may set a precedent for circumstances involving the promotion of crypto by celebrities resembling Cardi B. It might additionally set off elevated regulation and extra warning from influencers relating to the advocacy of cryptocurrencies.