The rise of celebrity-backed memecoins in 2025 has epitomized the duality of crypto markets: explosive potential and catastrophic risk. Tokens like YZY Money, EthereumMax (EMAX), and TRUMP have become case studies in speculative mania, celebrity influence, and regulatory ambiguity. For investors, the question is no longer whether these projects can generate short-term hype but whether they can sustain value—or if they are destined to collapse under the weight of their own hype.
The YZY Case: A Blueprint for Boom-and-Bust
YZY Money, launched by Kanye West (Ye) in August 2025, exemplifies the volatile lifecycle of a celebrity-backed memecoin. Within 40 minutes of its Solana-based debut, the token surged 6,800% to $3.16, briefly hitting a $3 billion market cap. However, by the same evening, its price had plummeted below $1.00, erasing two-thirds of its value. This collapse mirrored patterns seen in earlier tokens like EMAX and TRUMP, where insider allocations and liquidity manipulation left retail investors bearing the losses.
YZY’s tokenomics were inherently flawed. A staggering 70% of the supply was allocated to Ye and his team, with 20% to the public and 10% to liquidity. On-chain data revealed that a single multisig wallet controlled 87% of the supply pre-launch, enabling insiders to profit handsomely while latecomers faced steep losses. For instance, one wallet spent $2.28 million in SOL and reaped a $6 million unrealized gain within hours. Meanwhile, a user who invested $500,000 in YZY lost the same amount in under two hours.
The token’s liquidity structure further exacerbated risks. Unlike standard decentralized exchanges (DEX) pools, YZY was seeded with the token itself, allowing Ye’s team to manipulate pricing by injecting or withdrawing USDC at will. This setup drew comparisons to the 2023 LIBRA rug pull, where developers drained liquidity and left traders stranded.
A Broader Trend: Celebrity Hype vs. Investor Harm
YZY is not an outlier. In 2025, celebrity-backed memecoins have become a cottage industry of speculative hype, with tokens like EMAX, TRUMP, and JAVI following similar trajectories.
- EMAX (EthereumMax): Kim Kardashian’s 2021 promotion of EMAX led to a brief price surge, but the token collapsed 98% as insiders dumped their holdings. The SEC later fined Kardashian $1.26 million for failing to disclose her financial incentives.
- TRUMP Memecoin: Donald Trump’s token, with 80% of supply allocated to insiders, reached a $15 billion market cap before collapsing 88%. Critics labeled it a “pump-and-dump” scheme.
- JAVI (Javier Milei Token): Argentina’s presidential hopeful launched a memecoin during his 2025 campaign, only to abandon it after liquidity was pulled, leaving investors with worthless tokens.
These projects share a common thread: centralized tokenomics, lack of utility, and reliance on celebrity influence to drive demand. While promoters tout these tokens as “community-driven,” the reality is often a rigged game where insiders profit and retail investors lose.
Regulatory Scrutiny and the SEC’s Stance
The U.S. Securities and Exchange Commission (SEC) has taken a nuanced approach to memecoins. In August 2025, the SEC’s Division of Corporation Finance issued a staff statement clarifying that most meme coins, including YZY, are not securities under federal law. The agency argued that these tokens lack investment contracts or profit-generating mechanisms tied to the efforts of others. However, the statement also warned that fraudulent activities—such as insider trading or misleading promotions—remain subject to enforcement.
This ambiguity has left a regulatory gray area. While the SEC has not directly targeted YZY, it has pursued cases like EMAX and TRUMP, fining celebrities for undisclosed financial incentives. Internationally, regulators like the UK’s FCA and Argentina’s judiciary have also scrutinized celebrity-backed tokens, particularly those linked to rug pulls or political campaigns.
Investment Risks and Lessons Learned
For investors, the risks of celebrity-backed memecoins are clear:
1. Extreme Volatility: Tokens like YZY exhibit hourly swings of 30% or more, making them unsuitable for risk-averse portfolios.
2. Insider Advantage: Centralized tokenomics and liquidity control often favor insiders, leaving retail investors at a disadvantage.
3. Regulatory Uncertainty: While memecoins may avoid securities laws, they remain vulnerable to enforcement actions for fraud or misrepresentation.
The broader lesson is that speculative hype rarely translates to sustainable value. Projects like YZY, which promised a “new economy” through Ye Pay and a YZY Card, have yet to deliver tangible utility. Without real-world applications or transparent governance, these tokens are destined to repeat the boom-and-bust cycles of their predecessors.
Conclusion: Proceed with Caution
Celebrity-backed memecoins in 2025 have proven to be high-risk, high-reward assets. While the allure of quick profits is undeniable, the structural flaws in these projects—centralized tokenomics, liquidity manipulation, and regulatory scrutiny—make them poor long-term investments. For investors, the key takeaway is to prioritize due diligence, avoid FOMO-driven decisions, and recognize that hype rarely outlasts reality.
As the crypto market evolves, the focus must shift from celebrity endorsements to sustainable innovation. Until then, the risks of speculative hype will continue to outpace the rewards.