Kanye West, the hip-hop artist who goes by Ye, appears to have launched his own cryptocurrency, YZY, sparking a riot of trading activity.
In February, West rejected the idea that he might launch a crypto coin. “I’M NOT DOING A COIN,” he wrote, in a since-deleted post on X. “COINS PREY ON THE FANS WITH HYPE.” He seems to have changed his mind.
On Wednesday evening, West’s X account announced the YZY coin in two posts. “The official Yeezy token just dropped,” said West, in a strangely deadpan video clip that some X users speculated was AI-generated.
As traders piled in, the coin’s paper value surged to $3 billion, then plummeted by two-thirds in the span of three hours as early investors cashed out. Since the start of trading, investors have placed more than $740 million worth of trades. The majority of traders have recorded losses, collectively losing more than $20 million, says blockchain analytics company Nansen.
Winner of more than 20 Grammy Awards, West has become increasingly unmoored and erratic in his behavior in recent years. Most infamously, West made a series of antisemitic remarks in 2022 that drew widespread condemnation and led Adidas to abandon a lucrative partnership with his design label. In May, he released a music video entitled “Heil Hitler.”
The YZY coin is supposedly part of a grander constellation of products called YZY Money, which also purports to include a crypto payments service and debit card. “YZY Money is a concept to put you in control, free from centralized authority,” the website claims.
According to the website, 20 percent of the YZY supply has been released, 10 percent has been pooled on exchanges to allow for smooth trading, while the remaining 70 percent is held by Yeezy Investments LLC. The company cannot gain access to those coins for at least three months, a common practice meant to prevent issuers from dumping their holdings and sinking the price of a coin.
It is unclear who controls Yeezy Investments, which is registered in Delaware and therefore not required to disclose its ownership structure. Yeezy Investments operates the YZY Money website under a licence granted by Ox Paha Inc., a company through which West manages his intellectual property, the terms and conditions state.
Typically, rookie crypto traders are warned away from coins whose supply is concentrated in the hands of a small number of parties, for fear they might sell off their holdings en masse, driving down the price of the coin.
“You have to consider longer down the line,” says Nicolai Søndergaard, research analyst at Nansen. “Let’s say all tokens unlock in two years, you might not want to be in a token at that point. You could fairly assume there would be a sell-off.”
Patterns in the trading activity in the minutes after the YZY coin announcement have led to further questions about the integrity of the launch.
Great Job Joel Khalili & the Team @ WIRED Source link for sharing this story.
