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 criticism from a outstanding Dubai-based VC agency and native Emirati traders.
It accused market manipulation and fraud in regards to the promotion and buying and selling of $WAP.
Cardi B’s Crypto Endorsement Under UAE Investigation
The UAE Securities and Commodities Authority opened an investigation into potential securities regulation violations involving the Cardi B-endorsed cryptocurrency $WAP.
The crypto pockets handle 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 title of the rapper’s hit music. Message included a video of WAP’s mascot – an animated cat – alongside a pockets handle. Crypto safety analysts have recognized the handle as a determine tied to prior nefarious exercise within the cryptocurrency market. This has raised issues in regards to the endorsement and potential danger to traders.
The investigation has revolved round costs that the $WAP token was a part of a “pump and dump” scheme. According to the SCA, the token was manipulated by promotional actions by key opinion leaders and insiders. They had been allegedly paid to pump up the cryptocurrency on completely different social platforms. These sort of wrongdoings usually are not new. Recently, the Federal Bureau of Investigation has performed an enormous thoughts recreation by launching a fake crypto token known as NexFundAI to reveal large-scale crypto pump-and-dump scheme.
According to experiences, promotional actions included a community of influencers who, in flip, acquired hefty chunks of the $WAP token without cost.
Analytics agency Bubblemaps urged that, on this case, heavy bundling of provide and strategic gross sales drove the token’s value up earlier than the insiders offloaded their stock on the lack of retail traders.
Several social media accounts had been reportedly concerned within the scheme, in line 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
Specifically, the outcomes of SCA determine 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 monetary curiosity. These violations can lead to extreme punishment, together with heavy fines, a ban on buying and selling, and even prison costs in opposition to the perpetrators if confirmed.
UAE is, alternatively, very crypto pleasant. Just just lately, OKX announced that it formally launched its buying and selling platform within the United Arab Emirates to all retail and institutional traders after buying a full working license.
Cardi B and different influencers’ involvement have made this investigation that rather more complicated. In the cryptocurrency market, it’s not unusual for tokens that celebs endorse to quickly improve in value. This gives room for manipulative practices that could be laborious for regulators to uncover in actual time.
Furthering the investigation, the SCA has written to X for data regarding accounts selling $WAP. It is 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 similar to Cardi B and social media influencers typically shill tokens. Tokens can simply be puffed up and collect market momentum, which could additionally make them simple targets for pump-and-dump schemes. Besides hurting particular person traders, such schemes cut back public belief in digital property.
This case thus offers a robust sign for rising regulatoins relating to the social promotion of cryptocurrencies by public figures.
It raises questions in regards to the duties of social media platforms about proliferating the product promotion with fraudulent intent. As 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 instances involving the promotion of crypto by celebrities similar to Cardi B. It might also set off elevated regulation and extra warning from influencers relating to the advocacy of cryptocurrencies.
Teuta
Teuta is a seasoned author and editor with over 15 years of expertise in macroeconomics, know-how, and the cryptocurrency and blockchain industries. Starting her profession in 2005 as a life-style author for Cosmopolitan in Croatia, she expanded into masking enterprise and economic system for a number of esteemed publications like Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing crypto to be one in all humanity’s most vital innovations. Her fintech involvement started in 2014, specializing in crypto, blockchain, NFTs, and Web3. Known for her wonderful teamwork and communication abilities, Teuta holds a double MA in Political Science and Law, enjoys punk rock, chablis, and has a ardour for sneakers.
Disclaimer: The introduced content material might embrace the private opinion of the writer and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The writer or the publication doesn’t maintain any accountability on your private monetary loss.
