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Last Wednesday, viral TikTok sensation Haliey Welch launched a crypto memecoin named for her infamous “Hawk Tuah” catchphrase, touting the token as a way to connect with her fans. The token briefly spiked, climbing to a nearly $500 million market cap. Soon after, to the surprise of no one—other than the unlucky few who decided to buy HAWK on public markets—the coin collapsed more than 95%. The upshot is retail investors got fleeced, while a group of insiders pocketed $3 million, according to blockchain analytics firm Bubblemaps.
The episode has all the markings of a dreaded “rug pull”—crypto slang for a familiar scam where bad actors hype a new project to investors to drive up the price. They then sell off a stash they kept for themselves, leading the value of the new cryptocurrency to plummet. “They’ve turned this into a one-day pump and dump,” Nicolas Vaiman, the founder and CEO of Bubblemaps, told Fortune.
Welch could face civil or even criminal charges for the HAWK scheme, according to one ex-Department of Justice prosecutor, though it’s not clear she was in on it. When she spoke with Fortune ahead of the launch, she claimed to be unaware that celebrities like Kim Kardashian and Lindsay Lohan had landed in legal trouble for promoting unregistered coins. Welch’s team did not respond to multiple requests for comment, and her lawyer, Christian Barker, could not be reached by phone.
“I think she was used as a marketing stunt by some people who knew what they were doing,” Vaiman said. “They managed to fabricate her into a crypto celebrity.”
Haliey Welch catapulted into internet fame this summer when a TikTok of her colorful intimacy advice went viral. She managed to parlay the moment into lasting celebrity, including frequent appearances on popular podcasts and a talk show of her own. Welch also began to show up at crypto conferences—an industry, she previously told Fortunethat she viewed as a “scam” that was an “easy way for you to lose money.”
Nonetheless, Welch decided to dive headfirst into the volatile sector, teaming up with OverHere, a crypto launchpad for so-called memecoins, which are cryptocurrencies based on internet trends such as Pepe the Frog that sometimes reach market caps in the billions of dollars.
Welch pitched her token as primarily as a reward for her fan base, saying there would be giveaways to podcast listeners and buyers of her merchandise line. Behind the scenes, however, her HAWK partners had other plans. They began reaching out to crypto insiders and promising first dibs before the coin went live.
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