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The Ukrainian government questioned the $WAP token, which is developed by Solana and had celebrity endorsements from Cardi B, among others. $WAP selling is not safe as the UAE Securities and Commodities Authority has begun an investigation into matters related to possible violations. The study is based on celebrities such as Cardi B to endorse the token and possible scams. This case would largely support growing concerns regarding the need for bringing regulatory reforms to Crypto markets.
The Securities and Commodities Authority of the United Arab Emirates has opened an inquiry into what appeared to be securities fraud related to the cryptocurrency known as $WAP, a token of the Solana blockchain that gained a lot of attention due to endorsers Cardi B. It arrived following a petition filed by a leading Dubai-based VC firm and some local Emirati investors. It was also indicted in another case of market manipulation and fraud regarding the touting and sale of $WAP.
The SEC isn’t the only agency probing Cardi B’s crypto endorsements: UAE also opened an inquiry into the rapper’s shilling of W Funk.
The UAE Securities and Commodities Authority then launched an investigation of securities law violations concerning the $WAP, endorsed by Cardi B.
A crypto wallet address that rapper Cardi B, used while shilling WAP tokens that the media alleged belonged to a prominent crypto fraudster.
Cardi B’s Crypto Endorsement Under UAE Investigation
WAP is another meme coin that uses the name of a song of the rapper and features cats. The message contained a video of WAP’s mascot – an animated cat – as well as a wallet address. Crypto security analysts recognized the address as the person involved in previous malicious operations in the cryptocurrency market. This has resulted in endorsement issues of the investment and risk implications for the investors.
The probe has therefore focused on allegations that the $WAP token was involved in a pump-and-dump scandal. In a statement to the SCA, the token was influenced by promotional activities by key opinion leaders as well as insiders. Sources claimed that they received money for hyping the cryptocurrency on various social networks.
These kinds of wrongdoings are rampant and not new. Earlier this week, the Federal Bureau of Investigation played a big mind game itself and created a fake crypto token known as NexFundAI to bust a massive crypto pump-and-dump scam.
By the book, promotional activities involved a network of influencers, who, in return, would be given large chunks of the $WAP token for free.
Analytics firm Bubblemaps went further to say that it was the combination of high supply and strategic sales that pushed the token up only for insiders to dump their inventory at the expense of the retail traders.
Several social media accounts were said to have been used in the scheme, even as an investigation that suggested that there had been a coordination to inflate or manipulate the market value of the token.
UAE Probes Crypto Token Promotion: Potential Securities Violations
More so, the findings of SCA reveal that promoters, as well as traders in $WAP, have violated different sections of the UAE & US Company rules and regulations of securities laws regarding market control and failure to disclose an interest in the amount of money. The penalties that accrue from these violations are steep and huger penalties, fines, trade suspensions and criminal charges if prosecution is pursued against the offenders.
UAE is on the other hand relatively friendly to crypto. However, just recently, OKX proudly stated that it has started its trading platform in the United Arab Emirates for all retail and institutional investors because of the complete operating license.
Through this investigation, Cardi B and other influencers have made this much more difficult. There have been reports, especially in the cryptocurrency market showing how tokens most endorsed by celebrities shoot up in price. This leaves space for dishonest behaviours that might not be easy for the regulators to detect as and when they happen.
Additionally extending the inquiry, the SCA has requested from X all accounts related to the promotion $WAP. It is now appealing to the other US regulatory agencies including the SEC to come on board and follow deeper probes of the allegations.
A Case for Tighter Oversight
Investigating $WAP emphasizes some critical issues of cryptocurrency market regulation, which have been previously highlighted. Some examples of token promotion are issued by Cardi B and other pop stars or other famous persons and combined with influencers. Tokens can quickly get the attention of the market and have the potential to get boosted, which is maybe the reason why pump-and-dump schemes can target them.
Other than affecting the small trader, the above arrangements erode confidence in digital assets. It thus sends a very clear message for further regulation with the public advocacy of cryptocurrencies. social media influencers often shill tokens. Tokens can easily be hyped up and gather market momentum, which might also make them easy targets for pump-and-dump schemes. Besides hurting individual investors, such schemes reduce public trust in digital assets.
This case thus gives a strong signal for increasing regulations regarding the social promotion of cryptocurrencies by public figures.
It has implications to raise questions to social media networks regarding spreading product promotion with scams. Hence one can conclude that by getting deeper into the investigation, the SCA and other regulators may shortly turn to increasing regulation of cryptocurrency markets for market integrity purposes.
This case could act as case law for other cases of the promotion of crypto by celebrities including the likes of Cardi B. It also may result in enhanced control and better discretion by influencers in terms of the promotion of cryptocurrencies.
