Key Takeaways

• An on-chain investigation linked the wallets that “sniped” the Kanye West-themed YZY token launch to the same group that extracted over $21 million from the LIBRA token launch six months ago.

• The findings suggest a pattern of coordinated “insider trading” where the same actor or group used pre-launch knowledge to purchase tokens far below the public price, generating massive profits.

• This recurring issue, confirmed by on-chain analytics platform like Nansen, highlights a “crime season” of market manipulation and unfair practices that undermine trust in new token launches.

A new on-chain investigation has revealed a disturbing connection between two of the most volatile token launches in recent memory.

Pseudonymous analyst Dethective linked the wallets that “sniped” the recent Kanye West-themed YZY token to the same wallets responsible for a $21 million insider scheme on the LIBRA token launch six months ago.

This discovery, confirmed by on-chain analytics platforms Nansen, suggests a troubling pattern of market manipulation by a coordinated group of actors who are using insider knowledge to unfairly profit from memecoin launches.

The Anatomy of a Sniper Attack

In the fast-paced world of decentralized finance, a “sniper” is a trader who uses automated bots to purchase tokens in the exact millisecond they become available.

These “sniper bots” monitor the blockchain’s transaction pool for new token launches and then execute a pre-programmed buy order with a higher gas fee to ensure their transaction is processed before anyone else’s.

This gives them an enormous advantage, allowing them to acquire tokens at a much lower price than what is available to the general public.

In the case of the YZY token, Dethective’s investigation showed that a single sniper wallet was able to buy $250,000 worth of tokens at just $0.20, far below the price most traders paid.

Within minutes, the wallet secured a profit of over $1 million. Nansen and Cyvers confirmed that this wallet overlapped with the wallets involved in the LIBRA launch, where the same actor or group extracted a combined $21 million in suspected insider gains.

These funds were later moved to centralized exchanges or other platforms, obscuring their trail. The analyst noted that the group’s preparation and “huge size” of their purchases on both tokens were definitive proof of insider information.

An Industry-Wide Problem

This is not an isolated incident but a recurring problem in the crypto space. The on-chain sleuths pointed out that notorious sniper “Naseem,” who made millions on the Official Trump (TRUMP) memecoin, was also an early buyer of YZY, using a wallet previously funded with TRUMP profits.

While some argue that these “snipers” are simply skilled at exploiting market inefficiencies, many see it as a form of illegal insider trading that undermines trust in the entire ecosystem.

Final Thoughts

The on-chain connection between the YZY and LIBRA sniper wallets is a stark reminder of the risks of investing in new, high-flying tokens. These schemes are not just a result of market volatility; they are often the product of coordinated, pre-meditated insider attacks that leave retail investors at a significant disadvantage.

Frequently Asked Questions

What is a “sniper” in crypto?
A “sniper” is a trader who uses an automated bot to buy new tokens at the exact moment they launch, often gaining a significant price advantage over manual traders.

How did the on-chain sleuths confirm the link?
On-chain analysts traced the funds and wallet addresses used in the YZY sniper attack and found that they had previously received funds from and been used in a similar insider trading scheme on the LIBRA token launch.

What are the legal implications of this?
While insider trading laws are not yet clearly defined for decentralized cryptocurrencies, these activities are ethically problematic and can lead to significant financial losses for the public, eroding confidence in the market.