Kanye West, now known as Ye, has created controversy with his YZY token on the Solana blockchain. Launched in the early hours of Thursday, the token will purportedly help people buy Yeezy products. At first, it reached a market capitalization of over $300 million.
However, this growth soon faced serious questions about insider trading, causing the token’s price to drop significantly in the hours leading up to press time.
Kanye’s YZY Token Raises Concerns
YZY’s market value rose to over $300 million soon after its launch. This increase was mainly due to Ye’s celebrity and the excitement in the crypto community. However, data from Lookonchain showed signs of possible manipulation in on-chain activities. One trader supposedly used two wallets to buy 1.89 million YZY tokens at $0.24 each, spending a total of $450,000.
This trader also paid a high-priority fee of 129 $SOL (around $24,000) for early access, suggesting careful planning. Despite the initial excitement, the value of the YZY token dropped sharply, similar to past pump-and-dump schemes related to the LIBRA token, which was once supported by Argentine President Javier Milei.
On-chain data revealed that this insider sold 1.59 million YZY tokens for $3.37 million at a peak price of $2.12, making a 760% profit of about $3.4 million. This individual reportedly still holds 303,425 YZY tokens, currently worth about $510,000, raising further concerns about possible market manipulation.
Is This Another Pump-and-Dump?
YZY’s project documents included a class action waiver that protects it from collective lawsuits. This rule, upheld by a 2011 U.S. Supreme Court decision, has raised concerns about investor rights and fairness, increasing doubts about the project’s stability.
Conor Grogan shared his concerns on social media. He estimated that 94% of YZY tokens are held by insiders, with 87% in one multi-signature wallet. His analysis showed that more than 3% of transactions were large buy orders during the initial launch, while only 7% went to liquidity pools.
Social media has since reacted to the mystery surrounding the token launch. One X user, @legen_eth, shared a screenshot of a supposed Ye rejecting a monetary offer to join in the seeming pump-and-dump scheme, replying “Stay safe, boys.”
The situation around YZY is similar to other celebrity-backed tokens, like Donald Trump’s TRUMP and Melania Trump’s MELANIA, which also showed unpredictable price swings. Overall, allegations of insider trading, YZY’s centralized structure, and the lack of accountability measures have raised doubts about its legitimacy, making potential investors nervous about its future.
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