The UAE Securities and Commodities Authority has initiated a probe into $WAP, a Solana-based token promoted by celebrities such as Cardi B.
The United Arab Emirates’ Securities and Commodities Authority (SCA) has initiated an investigation into alleged securities violations involving the cryptocurrency $WAP, a Solana-based token promoted by prominent celebrities like Cardi B.
The probe follows a formal complaint from a Dubai-based venture capital firm and local Emirati investors, accusing the token’s promotion and trading of fraud and market manipulation.
Cardi B’s Crypto Endorsement Under UAE Scrutiny
The SCA’s investigation into possible securities violations centers around the Cardi B-endorsed cryptocurrency, $WAP.
The rapper shared a crypto wallet address while promoting $WAP tokens on her official X account, which analysts have linked to a notorious figure involved in previous cryptocurrency scams.
Cardi B’s post featured a promotional video of the $WAP mascot—an animated cat—alongside the wallet address, raising concerns about the endorsement’s legitimacy and the risks posed to investors.
The investigation has focused on allegations that $WAP was part of a “pump and dump” scheme.
The SCA claims that promotional efforts by key opinion leaders and insiders manipulated the token’s value, with some influencers reportedly being paid to inflate $WAP’s price across various social platforms.
This method is not unprecedented; for instance, the FBI recently used a fake cryptocurrency called NexFundAI to expose a similar pump-and-dump operation.
Reports suggest that influencers involved in promoting $WAP received large amounts of the token for free.
Analytics firm Bubblemaps noted that bundled token supplies and strategic sales artificially drove up the price before insiders sold their holdings, leaving retail investors to bear the losses.
Social media accounts are alleged to have played a role in coordinating efforts to manipulate the token’s market valuation.
UAE Investigates Securities Violations in Crypto Promotion
The SCA’s investigation has determined that $WAP’s promoters and traders may have violated multiple UAE and U.S. securities laws, specifically concerning market manipulation and failure to disclose financial interests.
If proven, these violations could lead to harsh penalties, including heavy fines, trading bans, and possibly criminal charges.
UAE is, on the other hand, very crypto-friendly. Recently, OKX announced that it officially launched its trading platform in the United Arab Emirates to all retail and institutional investors after acquiring a full operating license.
The cryptocurrency market often sees tokens promoted by celebrities skyrocket in value, creating opportunities for manipulation that can be difficult for regulators to catch in real-time.
As part of its probe, the SCA has requested information from X regarding accounts promoting $WAP and is seeking collaboration with U.S. regulators, such as the SEC, to investigate the allegations thoroughly.
A Push for Stronger Oversight
The investigation into $WAP highlights ongoing issues in the regulation of the cryptocurrency market.
Celebrities like Cardi B and social media influencers frequently endorse tokens, which can quickly gain momentum and become vulnerable to pump-and-dump schemes.
These schemes not only harm individual investors but also erode public trust in digital assets.
This case may lead to tighter regulations on public figures’ social media promotion of cryptocurrencies.
It also raises concerns about the responsibility of social media platforms in controlling the spread of fraudulent product promotions.
As regulators dig deeper, there could be a push for increased oversight of cryptocurrency markets to protect market integrity.
Moreover, this case could set a precedent for future situations involving celebrity crypto endorsements, encouraging influencers to exercise more caution when promoting digital assets.
