Token debuts remain a contentious issue, often criticized for their poor execution that allows individuals, supposedly armed with insider information about impending launches, to profit through front-running campaigns.

The latest example is the «Base is for everyone» token announced by Coinbase’s Ethereum Layer 2 solution Base on Wednesday. Three crypto wallets bought tokens ahead of the official announcement on X, resulting in significant profits, according to blockchain sleuth Lookonchain.

At around 19:30 UTC on Wednesday, Base announced the debut of its token minted via Zora, an on-chain social network, empowering creativity by turning any content posted on its network into tradable coins. The token quickly rose to a market capitalization of over $15 million, bringing significant gains to at least three crypto addresses that acquired coins before the official announcement on X.

«3 wallets bought a large amount of «Base is for everyone» before @base posted and sold them, making a profit of ~$666K,» Lookonchain said on X.

The wallet address 0x0992 invested 1.5 ether (ETH), to purchase 256.39 million units of the token at 12:30 PM UTC and sold the entire coin stash for 108 ETH following the official announcement, pocketing a profit of $168,000 in just over an hour. Wallet address 0x5D9D invested 1 ETH ($1,580) and walked away with $266,000 profit, and another address, labelled 0xBD31, made $231,800.

The token’s market capitalization tanked to less than $2 million after that as Base announced another coin for its FarCon poster, sucking out liquidity from the Base is for Everyone token and leaving entrants in the latter with a large loss.

However, valuations have recovered since then, with the market capitalization of Base is for everyone topping the $18 mark as of writing, per data source DEX Screener. Base creator Jesse greenlighted the token, saying, «The goal is to “normalize putting all content on-chain.»

Base only posted on Zora

Coinbase clarified that the Base is for everyone coin is not the official cryptocurrency of Base and the layer 2 did not directly sell these. “Base posted on Zora, which automatically tokenizes content,” Coinbase’s spokesperson told CoinDesk.

The legal disclaimer on Zora suggested the same, with Base also clarifying its position on X, saying, it shall never sell these tokens.

“To be clear, Base will never sell these tokens, and ​​these are not official network tokens for Base, Coinbase, or any other related product. The content we share is creative, and we’re going to keep bringing culture on-chain,” Base said.

Negative wealth effect

The rapid boom-bust cycles in these smaller tokens often create a net negative wealth effect, allowing a select few to profit significantly while the majority face losses. This often leads to liquidity drain from the broader digital assets market.

The larger the boom-and-bust cycles associated with these coins, the stronger the negative wealth effect.

For instance, this year’s debut of LIBRA and TRUMP tokens destroyed millions in investor wealth, marking a major price top in bitcoin and the broader crypto market.

A federal judge agreed to pause an ongoing lawsuit between 18 state attorneys general and a decentralized finance lobbyist group against the U.S. Securities and Exchange Commission (SEC) on Wednesday, after the parties noted the SEC’s new leadership.

The state AGs, all Republicans, filed the lawsuit alongside the DeFi Education Fund last November after Donald Trump’s win in the 2024 presidential election. They allege that the federal securities regulator had exceeded its authority in filing lawsuits against crypto exchanges. In Wednesday’s filing, the SEC suggested that Paul Atkins’ confirmation as the new agency chair could end the litigation.

«As support, the Defendants state that due to a leadership transition in the Securities and Exchange Commission, this case could potentially be resolved,» the filing said.

The judge ordered the parties to file a joint status report within 30 days but paused all deadlines for 60 days.

Originally, the lawsuit argued that the SEC’s enforcement actions were intruding on state regulators’ abilities to police digital asset firms within their own borders.

«Some States, for instance, have enacted regulatory regimes for financial institutions focused on digital assets; others have required digital asset platforms to obtain money-transmitter licenses and security bonds to guarantee liquidity,» the lawsuit said.

«While state regulatory approaches have varied in accordance with local needs, they have consistently endeavored to provide transparent and administrable rules of the road. And Congress has repeatedly declined proposals to give federal agencies broad regulatory power over digital assets.»

Congress is expected to pick up market structure legislation that may address federal regulators’ roles in overseeing crypto this year, and key committees have already begun holding hearings.

In the meantime, the SEC has already dropped investigations and lawsuits into more than a dozen companies and paused lawsuits against a few others.

IRS broker rule

A separate lawsuit filed by the DeFi Education Fund, the Texas Blockchain Council and the Blockchain Association against the Internal Revenue Service was also dropped on Wednesday. This lawsuit argued that the IRS’ DeFi broker rule went beyond the agency’s authority.

Trump signed a joint House and Senate resolution under the Congressional Review Act nullifying this rule last week — the first legislative item addressing crypto that he signed as president.

In a filing Wednesday, the parties said the lawsuit had become «moot» after Trump’s signing the resolution.

A modest bitcoin rally to a possible challenge of the $86,000 level quickly reversed during U.S. afternoon trading hours on Wednesday as Federal Reserve Chairman Jerome Powell warned on the effects of President Trump’s tariff regime.

«The level of the tariff increases announced so far is significantly larger than anticipated,» said Powell in a speech. «The same is likely to be true of the economic effects, which will include higher inflation and slower growth.»

In other words, stagflation — a throwback to a sizable portion of the 1970s when the U.S. experienced weak economic activity alongside double-digit inflation.

«We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,» continued Powell.

The price of bitcoin (BTC) fell about 2.5% in the minutes following the Powell remarks, now trading at $83,700, down 1.5% over the past 24 hours.

U.S. stocks, which had been trying to mount a comeback from opening declines, also were hit, the Nasdaq slumping 3.4% to a session low.