Cardi B Promotes $WAP Memecoin, Sparks Crypto Controversy

TLDR

• Cardi B’s $WAP promotion led to a $21 million market cap.
• PeckShield warned of potential account compromise and scams.
• Regulatory bodies are investigating the $WAP token promotion.

Cardi B, a renowned Grammy-winning rapper, has recently sparked widespread discussion in the cryptocurrency sphere. She promoted a memecoin named $WAP on her official X (Twitter) account, leading to considerable skepticism and controversy within the crypto community.

Her endorsement quickly drew attention from blockchain investigation firms like Bubblemaps and security companies such as PeckShield, who are assessing the potential risks posed by this token. Both organizations are known for their work in tracking irregular token distributions and possible scams. The involvement of Cardi B has highlighted ongoing issues with celebrity promotions in the crypto space.

Cardi B’s Entry into Crypto Sparks Controversy

This promotion marks Cardi B’s first foray into cryptocurrency, attracting both intrigue and concern regarding her influence on retail investors. The memecoin she endorsed, $WAP, experienced a market capitalization surge, reaching approximately $21 million shortly after launch. Liquidity for the token peaked above $670,000, as per on-chain data.

Questions arose about the legitimacy of this endorsement, with some suspecting her X account may have been compromised. PeckShield, a known blockchain security firm, issued a cautionary statement: “Cardi B’s X account seems to be compromised. Be cautious when interacting with any address/link in the post.” This statement reflects the broader concerns about potential scams that may emerge from celebrity-endorsed tokens.

Industry Reactions and Speculation

The reaction to Cardi B’s promotion was swift, with people like Iggy Azalea, who had launched her own memecoin called MOTHER, publicly criticizing the move. On-chain analysts and crypto enthusiasts are also actively discussing Sahil Arora’s rumored involvement. Arora is known for organizing celebrity-linked token launches associated historically with fraudulent activities.

Blockchain investigation firm Bubblemaps noted suspicious activity regarding $WAP transactions. They reported: “All wallets involved in the bundling transferred their tokens one-to-one to brand-new addresses 4 hours ago. Good try.” This suggests attempts to obscure token distribution, which is typical of a “rug pull” scenario.

Financial and Market Implications

The rapid increase in $WAP’s market valuation and liquidity points towards heightened retail interest, although formal institutional funding evidence is lacking. The activity appears coordinated through wallet clusters as indicated by on-chain investigations. While $WAP operates on the Solana network, wider effects on other cryptocurrencies like ETH or BTC are speculative but unlikely as per current analysis.

The total value locked (TVL) and liquidity flux in Solana’s decentralized exchanges (DEX) saw temporary boosts, mirroring trading volumes. However, given the typical lifecycle of celebrity-endorsed tokens, such spikes are often short-lived, with eventual crashes as seen with similar past launches.

Community and Regulatory Concerns

Within the cryptocurrency community, skepticism about celebrity memecoins prevailed. General sentiment on platforms like Twitter and Discord was cautious, with many users warning of potential pumps and dumps akin to past events with other celebrity-assigned tokens. Despite the initial excitement, there is a prevailing wariness of scams.

Regulatory bodies are beginning to take note of such promotions, with the UAE Securities and Commodities Authority reportedly launching an investigation into $WAP. As of now, no official statements have been made by U.S. or European regulators, yet the high-profile nature of this promotion continues to draw attention.