Solana News Today: Investors Outpaced by Insiders in Kanye's YZY Crypto Launch

YZY Money, the cryptocurrency initiative launched by rapper Kanye West (known as Ye), has introduced a "class action waiver" clause in its terms and conditions, according to official documents. The clause prohibits users from initiating, joining, or participating in any class action lawsuits related to claims or disputes against the project’s Indemnified Parties. It further states that users agree to pay legal costs incurred by these parties in enforcing the clause, should a court intervene [3].

The YZY token, launched on the Solana blockchain, has already drawn significant attention and volatility. In just 40 minutes, the token reached a market capitalization of $3 billion before dropping to around $1.05 billion. The token was launched as part of a broader financial system known as YZY Money, which includes a payment processor called Yeezy Pay and a card for spending digital assets [2]. The project allocates 20% of its total supply to public participants, with the remainder split between liquidity (10%) and vested tranches for Yeezy Investments LLC (70%) [2].

To deter speculative trading, the token employs an anti-sniping mechanism involving 25 contract addresses, from which one was randomly chosen as the official YZY token. This approach aims to prevent early traders from exploiting the token’s initial liquidity [2]. Despite this, concerns over insider trading have emerged, with onchain analytics firm Lookonchain reporting that at least 94% of the token supply was held by insiders at the time of launch, with one multisig wallet accounting for 87% of the supply [1].

These concerns have led to mixed reactions among traders. While some, including James Wynn, a well-known leverage trader, have positioned themselves as buyers, others have taken short positions. Wynn cited the recent success of Donald Trump’s memecoin as a reason for his bullish stance on YZY [1]. Meanwhile, retail traders have also engaged in the market, with one user reportedly profiting $6 million during the token’s peak before experiencing significant losses as the price dropped [1].

The token’s rapid rise and fall highlight the volatile nature of celebrity-backed memecoins, which have become a notable trend in the crypto market this year. These tokens often experience short-term spikes in value, driven by the influence of high-profile figures, but can quickly lose momentum amid regulatory scrutiny or negative sentiment. For instance, Argentine President Javier Milei’s support of the LIBRA token in February saw it briefly reach $4 billion in market cap before plummeting after backlash [1]. The YZY launch appears to follow a similar trajectory, with early enthusiasm giving way to skepticism over market fairness and token distribution.

The inclusion of the class action waiver clause in YZY Money’s terms has further raised legal and consumer protection concerns. By limiting the ability of users to pursue collective legal action, the project shifts potential liability and risk onto individual users, particularly in cases where disputes or losses could be attributed to mismanagement or insider activity. While the clause is framed as a standard legal provision, its presence underscores the need for investors to conduct due diligence and understand the risks associated with highly speculative assets like YZY [3].

Source:

[1] 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)

[2] Kanye West drops YZY meme coin on Solana (https://cryptobriefing.com/yzy-meme-coin-solana-launch/)

[3] YZY Money official documents contain a "class action ... (https://www.odaily.news/en/newsflash/444301)