In a move signalling stricter oversight of the crypto sector, the UAE has recently intensified its regulatory stance. The latest development sees the country launching an investigation into the $WAP token, endorsed by rapper Cardi B, whose popular song shares the same name. According to a notice regarding the Solana-based token, the UAE is probing it for potential securities violations.
The UAE's Securities and Commodities Authority (SCA) initiated a probe against the crypto token suspecting it could be part of a pump-and-dump scheme waiting to unfold. The SCA was alerted to the token by what its notice describes as a "prominent Dubai-based venture capital firm" and associated Emirati investors.
WAP Token and Suspicions Surrounding It
With an animated cat as its mascot, the WAP token falls under the memecoin category with a circulating supply of one billion tokens, as per CoinGecko. While the exact release date of this token remains unclear, its official X page was created in September this year.
In recent weeks, Cardi B, who boasts over 35 million followers on X, began promoting the $WAP token across her social media platforms. On October 8, she shared a promotional post along with a wallet address.
Her name is $WAP :feet::sweat_drops:
— Cardi B (@iamcardib) October 7, 2024
CA:Bz7vVzQhm2KMW1XgcrDruYega1MiwrAs1DQysrx4tFkp pic.twitter.com/BDvJqeqh0u
As per CoinTelegraph, a blockchain investigator going by the name of Wazz flagged that the wallet address posted by the WAP page was linked to multiple crypto scams.
Incredible how after the coin was basically dead after 3 days, everyone suddently shilled $WAP at the same time
— Wazz (@WazzCrypto) October 13, 2024
Also amazing that massive amounts of tokens were sent out from sniper wallets ($50-100K+ per wallet) hours just before that pic.twitter.com/2nTc1UFkvs
Soon after, blockchain data platform BubbleMaps claimed that $500,000 (roughly Rs. 4.20 crore) worth of WAP tokens were suspiciously dumped hours after launch. BubbleMaps also said that the WAP token is heavily bundled – that could have buyers purchase multiple units of the asset in one transaction.
60% of the supply bundled at launch
— Bubblemaps (@bubblemaps) October 8, 2024
already dumped $500k
her name is $WAP https://t.co/Ib6gkW2bHn pic.twitter.com/iAzfuaWaw1
$WAP is heavily bundled
— Bubblemaps (@bubblemaps) October 12, 2024
They used intermediary addresses to hide from Bubblemaps. Here's the map with those addresses included
Our V2 solves this (coming soon)https://t.co/OW4Sbr48p4 pic.twitter.com/GySQI13Mav
These factors have raised red flags among investors and blockchain watchdogs, suggesting the memecoin could be problematic.
UAE's Stance on the WAP Token
In its notice, the SCA said that the promoters of this token including Cardi B have hired a network of paid individuals who received the tokens for free through undisclosed financial arrangements.
As per the SCA, “Preliminary investigations suggest that the insiders associated with the $WAP token, alongside various paid Key Opinion Leaders, are orchestrating a clear pump and dump scheme. This scheme involves artificially inflating the price of SWAP through strategic promotions, followed by the systematic sale of their holdings, thereby inflicting significant financial losses on unsuspecting retail investors.”
The UAE authorities have joined forces with BubbleMaps to infer that this token is violating securities laws of the US as well as the UAE.
As of now, Cardi B has not reacted to the development.
Earlier this week, Dubai's Virtual Assets Regulatory Authority (VARA) issued a cease-and-desist order against seven crypto entities for operating their businesses without acquiring the required approvals.
