Crypto Rugpull? Arthur Hayes Calls Out Kanye’s $YZY Token After Costly Gamble
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The post Crypto Rugpull? Arthur Hayes Calls Out Kanye’s $YZY Token After Costly Gamble appeared first on Coinpedia Fintech News
The world-famous Hip-Hop artist, Ye, better known as Kanye West, launched his official crypto, $YZY. According to Nansen Data, within just 40 minutes of its release, the YZY token hit a market capitalization of $3 billion, but it quickly stumbled back to $1.05 billion. Despite the hype, on-chain analysts raised red flags.
Is YZY Legitimate? Analysts Claim Suspicious
West recently launched the token carefully after denying the promotion of fake currency for $2 million in February. But crypto experts were quick to point out the threats of potential insider trading risks.
Arthur Hayes, co-founder of BitMEX, reportedly bought into the token, viewing it as a short-term investment. However, the sentiment didn’t last long as he condemned the crypto. He wrote on X, “Oopsie … fam next time pls don’t let me trade shitters like $YZY. Should have just kept two-steppin.”
Coinbase Expert Verify Insider Trading in YZY
Coinbase director Conor Grogan said that insiders held 94% of the supply, with one wallet initially controlling 87% before distributing to others.
Grogan said, “At least 94% of the new Kanye token is insider-owned…87% of the new Kanye token was owned by a single multisig (now dispersed to multiple wallets).”
“3%+ was bought in a single transaction, with size, by assorted (prepared) wallets at market open,” he added.
Blockchain analytics firm Lookonchain also raised concerns, saying, “Multiple insider wallets prepared funds in advance and immediately bought $YZY…Insider wallet 6MNWV8 knew the contract address in advance and even tried buying yesterday.”
Mixed Reactions from the Traders
One trader spent $24,000 in Solana priority fees to secure $3.4 million gains, while another pocketed $6 million at peak. Not all were lucky, though. One user mistakenly bought the wrong contract, losing about $710,000. Fortunately, the user later recovered some losses by purchasing the correct contract.
This highlights the extreme volatility and risks involved in the token. It also demonstrates the substantial insider profits reported during the YZY token launch phase.
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FAQs
Analysts raised red flags due to suspicious activity, including a single wallet holding 87% of the supply and significant insider trading.
Coinbase and Lookonchain experts reported that insiders, who held 94% of the supply, knew the contract address in advance and bought large amounts at launch.
A multisig, or multi-signature, wallet requires multiple private keys to authorize a transaction, offering enhanced security. It was used by insiders to control the $YZY supply.
Insider trading is when individuals with privileged information, such as early access to a token contract, use it to make profitable trades before the public can.
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