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UAE regulators are investigating Cardi B’s $WAP coin for alleged fraud and a possible pump-and-dump scheme, raising serious concerns about celebrity-backed cryptocurrencies.
Cardi B’s Promotion of $WAP Triggers UAE Investigation
Famous people like Cardi B have been vocal about their support for the Solana blockchain and its associated cryptocurrency $WAP, which has sparked an inquiry by the United Arab Emirates' Securities and Commodities Authority on possible securities breaches.
A well-known Dubai VC firm and local Emirati investors formally complained, prompting the investigation.
Accusations of Fraud and Market Manipulation
Concerning the advertising and trading of $WAP, it claimed fraud and manipulation of the market.
The cryptocurrency $WAP, which has Cardi B's endorsement, is the subject of an inquiry by the UAE Securities and Commodities Authority investigating possible breaches of securities laws.
Cardi B's Wallet Address Linked to Crypto Fraud
During her promotion of WAP tokens, artist Cardi B allegedly disclosed the wallet address of a well-known crypto fraudster.
Cardi B promoted WAP in a promotional post on her official X account. The rapper's popular song "WAP" is the inspiration for a meme coin with a feline theme. The message contained a wallet address and an animated movie of the WAP mascot, a cat. The address has been linked to previous criminal behavior in the cryptocurrency industry, according to crypto security experts. The endorsement and the danger it poses to investors have been called into question as a result of this.
Pump-and-Dump Allegations Surface
Claims that the $WAP token was involved in a "pump and dump" scheme have provided the basis for the investigation, Coingape reports. Promotional operations involving influential people and insiders allegedly influenced the token, according to the SCA. A number of social media platforms claim that they were paid to promote the coin. Such transgressions are not recent. In an effort to reveal a massive crypto pump-and-dump fraud, the FBI recently launched a phony cryptocurrency coin called NexFundAI.
Influencers’ Role in Manipulating $WAP Token
The advertising activities allegedly involved a network of influencers who were rewarded with large portions of the $WAP token at no cost.
According to analytics firm Bubblemaps, in this instance, the token's price was driven up by massive bundling of supply and strategic sales. Then, the insiders sold off their inventory, leaving retail investors out of the picture.
Social Media Manipulation Investigated
An inquiry found evidence of collaboration involving multiple social media accounts in an accused plan to manipulate the token's market worth.
Some long-standing concerns about the regulation of the cryptocurrency business have been highlighted by the investigation into $WAP. Cardi B and other famous people, as well as social media influencers, frequently promote tokens. Because tokens can be rapidly inflated in price and gained traction in the market, they may also be susceptible to pump-and-dump tactics. Such schemes damage both individual investors and the public's faith in digital assets.
Call for Stronger Cryptocurrency Regulations
More regulations concerning the social promotion of cryptocurrencies by public personalities should be strongly considered in light of this case.
This situation calls into question the role that social media platforms should play in preventing the spread of deceptive product advertisements. The SCA and other authorities are looking into the cryptocurrency sector more, so more regulation might be on the way to safeguard the market.
Future Impact on Celebrity Endorsements
This lawsuit has the potential to establish new guidelines for future instances where celebrities like Cardi B promote cryptocurrency. It might also cause influential people to be more careful when they promote cryptocurrency, which would lead to more regulation.
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