Insiders Pile Millions While Retail Traders Bear YZY Token Losses

YZY, the memecoin launched by rapper Kanye West (also known as Ye) on the Solana blockchain, has become the center of controversy due to alleged insider trading and speculative trading activity by a small group of traders who reportedly made millions of dollars in profits. According to data from Nansen, 13 wallets each made over a million dollars in profit, with the top 13 wallets collectively generating $24.5 million in profit as they dumped the token [1]. The YZY token saw a rapid surge of 1,400% within an hour of its launch, hitting a peak price of $3 before dropping 74% within 24 hours to about $0.77 [1].

The token's launch raised serious questions about fairness and transparency. According to data analytics, over 94% of the token supply was held by insiders before distribution, with one multisig wallet controlling 87% of the supply [3]. Despite efforts to randomize the launch by deploying 25 contract addresses and selecting one at random to reduce bot activity, on-chain data suggests that certain wallets had advance access to the contract address and were able to buy YZY tokens before the official launch [3].

YZY's volatility was evident from the start, with the token reaching a $3 billion market cap just 40 minutes after its launch before plummeting to $1.05 billion amid mounting concerns of insider trading [2]. A single-sided liquidity pool was used, which means only YZY tokens were added to the pool, allowing developers or large holders to manipulate liquidity in ways that effectively enabled them to cash out [4]. This structure mirrored the controversial LIBRA token, which was also linked to a coordinated insider profit-making scheme [1].

Notable crypto traders and influencers, including BitMEX co-founder Arthur Hayes and leverage trader James Wynn, purchased the token, despite the growing concerns. Wynn described the move as a short-term trade and expressed confidence in replicating the success of Trump’s TRUMP memecoin [3]. However, retail traders bore the brunt of the losses, with one investor realizing a $1.8 million loss, while another suffered a $1.2 million loss [1].

The YZY token's performance is part of a broader trend of celebrity-linked memecoins that have seen rapid gains followed by sharp declines. For example, TikTok influencer Haliey Welch’s HAWK memecoin dropped 90% in a few hours, and similar patterns were observed with the Trump and LIBRA tokens [1]. Analysts have criticized these projects for concentrating profits among a small group of traders while retail investors are left with significant losses.

The YZY launch has sparked renewed calls for greater regulation and transparency in the memecoin space. Critics argue that celebrity endorsements and high-profile token launches often serve to transfer wealth from retail traders to well-connected insiders [1]. As the controversy continues, observers are closely monitoring whether regulatory bodies will take action to address the growing concerns surrounding memecoin speculation and alleged market manipulation.

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[1] 13 wallets made over $24M profit dumping the YZY token, ... (https://cointelegraph.com/news/yzy-token-bloodbath-sees-coordinated-snipers-extract-millions-from-kanye-fans)

[2] Kanye West YZY Token Hits $3B Before Insider Concerns ... (https://coinmarketcap.com/academy/article/kanye-west-yzy-token-hits-dollar3b-before-insider-concerns-surface)

[3] Kanye West YZY memecoin hits $3B, but falls after insider ... (https://cointelegraph.com/news/kanye-west-memecoin-pumps-3b-launch-then-falls-amid-insider-concerns)

[4] Insiders Cash In Millions as Rapper Ye 'Apparently' Issues ... (https://www.coindesk.com/markets/2025/08/21/insiders-cash-in-millions-as-ye-formerly-kanye-west-apparently-issues-yzy-token)