Hayden Davis’ $12M YZY Snipe Sparks Meme Coin Scandal

An address was reportedly targeted in a fraudulent investment scheme involving YZY, a Solana-based token linked to rapper Kanye West, and suffered a $710,000 loss before purchasing the genuine version of the token. As of the latest data, this investor is now facing an unrealized loss of $424,000, highlighting the volatile nature of meme coin investments and the risks associated with insider activity and speculative trading [1]. The YZY token, which reached a peak market capitalization of $3 billion shortly after its launch, has since experienced a dramatic decline, raising concerns about potential manipulation and fraudulent practices [4].

The YZY token's rapid rise and fall were accompanied by significant on-chain activity. Several wallets were pre-funded and primed to buy immediately after Kanye West's announcement, raising suspicions of insider trading. One of the most notable cases involves Hayden Davis, a well-known figure in the meme coin space and former promoter of the controversial Libra token. Davis’ linked wallets reportedly made $12 million from the YZY snipe by investing $2.8 million shortly after the token's public announcement [2]. The timing of the transaction—less than a week after a U.S. federal judge unfroze his assets in a related case—further amplified concerns about the integrity of the market and the potential for repeated exploitation of legal loopholes [3].

On-chain data also revealed that a major portion of the YZY supply was controlled by insiders, with 94% of the token supply held by a small group of wallets. Of this, 87% was initially stored in a multi-signature wallet, raising additional red flags about the centralization and potential misuse of the project’s resources. The token distribution model, which allocates portions to investment, team development, ecological development, public sale, and liquidity, includes a 2-year lock-up period for most allocations, except for the public sale and liquidity portions [6]. These structural features may have contributed to the imbalance in market dynamics and investor sentiment.

Further scrutiny of YZY has been driven by broader trends in the crypto market. The token is part of the so-called "Ye Pay" and "Yeezy Money Ecosystem," which includes a payment service and crypto debit card. The collapse of the token’s market cap from $3 billion to below $800 million within hours has led to widespread criticism and calls for tighter regulation in the meme coin sector. Additionally, reports suggest that the token was promoted through hacked celebrity social media accounts, further blurring the line between legitimate marketing and fraudulent activity [4].

The incident underscores the growing risks in the crypto space, particularly for projects with celebrity backing and speculative valuations. Meme coins, while often dismissed as trivial, can attract large sums of capital due to their viral appeal and social media traction. However, the absence of strong regulatory oversight and the ease with which tokens can be manipulated make these assets particularly susceptible to abuse [1]. As the industry continues to evolve, the need for clearer guidelines, greater transparency, and more robust investor protections becomes increasingly urgent. The YZY case serves as a cautionary tale for both investors and regulators alike [4].

Source:

[1] YZY Live Price Chart, Market Cap & News Today (https://www.coingecko.com/en/coins/yzy)

[2] Libra Wallets Linked to Hayden Davis Made $12 Million on ... (https://finance.yahoo.com/news/libra-wallets-linked-hayden-davis-195854508.html)

[3] LIBRA Promoter Made $12 Million from Kanye West's YZY ... (https://www.bitget.com/news/detail/12560604929972)

[4] Memecoin Frenzy: Hackers Hijack Celeb Instagram ... (https://www.mitrade.com/insights/news/live-news/article-3-1063899-20250823)

[5] Kanye West's YZY Token Turmoil, China's Stablecoin Pivot (https://unchainedcrypto.com/weekly-recap-kanye-wests-yzy-token-turmoil-chinas-stablecoin-pivot/)

[6] Uncovering Kanye West's $YZY coin: 9-second jump start, ... (https://www.panewslab.com/en/articles/1d731c49-9203-49e3-88e6-269bd173cd6b)