On-chain analysts revealed coordinated wallet activities in YZY and LIBRA, reigniting debates about insider trading driven by celebrity endorsements.

An on-chain investigator using the pseudonym Dethective recently discovered a suspicious pattern involving wallets that earned substantial profits from the issuance of two tokens—Kanye West's YZY coin and another token called LIBRA.

According to the findings, one wallet was able to purchase $250,000 worth of YZY tokens at a price of $0.20 each, while most traders paid over $1 per token. This gave the wallet a significant advantage, allowing it to achieve nearly $1 million in profit in just eight minutes. After quickly profiting, these earnings were transferred to a new 'treasury wallet.'

Identified extraction patterns for YZY and LIBRA

Interestingly, the same funding wallet had obtained significant capital during early activities related to the LIBRA token issuance six months ago. At that time, two special wallets rushed to purchase LIBRA tokens right away.

The first wallet stole about $9 million, while the second performed even better, stealing around $11.5 million. Both wallets used strategies similar to YZY trading. They purchased the tokens before the public could access them.

Overall, during the issuance process of YZY and LIBRA, these wallets extracted nearly $23 million in total. Most of the funds were later transferred to platforms like Kamino or exchanges like Binance.

Dethective points out that this pattern strongly indicates the involvement of insider information. The wallets involved do not randomly trade multiple different tokens. Instead, they appeared only when YZY and LIBRA launched, and always prepared to invest large sums. Without prior information about the token launch timing and method, such timing and scale would be nearly impossible.

While it is currently unclear who is behind these wallets, there is speculation about a possible connection to Hayden Davis, a controversial figure behind the LIBRA token. However, there is no evidence to support this link at present.

Dethective believes that these seemingly celebrity-driven 'meme coins' aimed at attracting newcomers to cryptocurrency may actually have another purpose—transferring wealth from ordinary traders to well-prepared insiders. These releases do not aim to create an equal opportunity market; instead, they seem to make the rich richer, with influential figures and insiders benefiting the most, while ordinary traders end up paying higher prices.

So far, over 60% of YZY traders have incurred losses.

Researcher Defioasis shared data on YZY token trader performance. Among the 56,050 wallets trading YZY tokens in a single day, nearly 45% either bought or sold, but not both at the same time. Many 'buy-only' wallets may be fake accounts created to exaggerate trading volume, while most 'sell-only' wallets are related to large holders or insiders cashing out, making tracking more difficult.

Among 30,884 wallets that simultaneously bought and sold, about 38% made a profit, but most wallets had small gains of less than $500. A small portion of wallets (406) had gains exceeding $10,000, and only 5 wallets had profits exceeding $1 million, some of which are related to insiders.

On the other hand, over 60% of traders actually incurred losses. In fact, nearly half of these traders ended up losing up to $500. In an extreme case, one trader ultimately lost over $1 million.