Ah, crypto. A land of innovation, decentralized dreams, and—let’s be honest—some of the most impressive scams you’ll ever see. If you’ve been around long enough, you already know the playbook: hype, FOMO, cash out, disappear. And yet, people keep falling for it.
Case in point: Hawk Tuah Coin.
Yeah, that one. The meme-ified, blink-and-you-missed-it token inspired by that viral video. If you weren’t paying attention, this Solana -based token went from $500 million in market cap to absolute dust in less than 48 hours. And if you were paying attention, well, you probably saw it coming from a mile away. Let’s break down exactly how crypto scams (specifically rug pulls) work—and why this one was a masterclass in the art of the grift.
Crypto Scams: What Even Is a Rug Pull?
For the uninitiated, a rug pull is exactly what it sounds like—developers pull the liquidity (the money backing the coin), leaving investors holding the equivalent of Monopoly money. It’s one of the most common scams in crypto, and somehow, people still think they’re getting in on the next Dogecoin.
The playbook looks something like this:
- Launch a token with some ridiculous theme. (Bonus points if it’s tied to a meme or celebrity.)
- Hype it up through social media, influencers, and paid promotions. (The more viral, the better.)
- Encourage people to ape in. (FOMO is a powerful drug.)
- Once the price skyrockets, the insiders dump their holdings.
- Investors panic-sell, the price crashes, and the developers ghost.
Lather, rinse, repeat.
The Hawk Tuah Disaster: A Case Study in Foolery
So, let’s talk about Hawk Tuah Coin. If you have no idea what I’m talking about, congrats, you’re probably richer than the people who invested in it.
The coin was created in December 2024, riding the high of Haliey Welch, aka the Hawk Tuah Girl, whose viral video had the internet in a chokehold. Some opportunistic developers decided, “Hey, let’s turn this into a meme coin and make a quick buck.” And oh boy, did they.
Step 1: Exploiting Viral Fame
The developers behind $HAWK used Welch’s sudden internet stardom to pump the token, implying—without actually stating—that she was involved. Welch’s name and likeness were plastered all over social media, helping the coin gain traction fast.
Except Welch had no idea what was happening. By the time she caught on, the damage was already done. The token had exploded in popularity, hitting half a billion in market cap.
Step 2: Let the Pump Begin
With the hype machine in full swing, retail investors (aka regular people who don’t know they’re about to get finessed) started buying in, hoping to strike it rich. The developers made sure the liquidity looked healthy and the price soared. Everyone was tweeting about it. Influencers were shilling it. Crypto bros were screaming, “WAGMI.”
You know where this is going.
Step 3: The Dump
On-chain data later revealed that a huge chunk of the tokens was controlled by just a few wallets. Meaning? The people who launched the coin were sitting on massive stacks, waiting for the right moment to cash out. And that moment came fast.
The second these insiders started selling, the price crashed hard. In less than 24 hours, $HAWK lost more than 90% of its value. Poof. Gone. Investors were left bag-holding worthless tokens, and the developers—well, they weren’t around to answer questions.
The Luna Collapse: When “Stable” Coins Aren’t Stable
If you thought meme coins were bad, let’s talk about Luna and TerraUSD (UST)—one of the most catastrophic failures in crypto history.
How Did Luna and UST Work?
Unlike meme coins, Luna was designed to be a stablecoin—a cryptocurrency meant to maintain a fixed value, usually pegged to the US dollar. Luna and UST operated in a delicate balance where UST could be exchanged for Luna at a fixed rate to maintain stability.
The Crash
In May 2022, a massive wave of withdrawals hit the Terra ecosystem, causing UST to lose its peg. Investors panicked, trying to cash out before things got worse. The algorithm designed to keep UST stable failed spectacularly. Luna’s supply ballooned as investors scrambled to exchange their UST, and both assets entered a death spiral.
Within a week, Luna plummeted from $119 to nearly zero. An estimated $40 billion in investor funds were wiped out overnight, causing widespread panic in the crypto market.
Terraform Labs CEO Do Kwon became a wanted man, facing lawsuits, fraud accusations, and eventual arrest. The Luna disaster proved that even “stable” crypto investments can implode in spectacular fashion.
How to Protect Yourself From Crypto Scams
If you’re still convinced you can get rich off the next meme coin, at least take some precautions:
- Do your research – Check the project’s whitepaper, team, and tokenomics before investing.
- Be skeptical of hype – If it sounds too good to be true, it probably is.
- Diversify your investments – Don’t put all your funds into one token, especially a meme coin.
Final Thoughts: Don’t Be the Exit Liquidity
The $HAWK fiasco and the Luna collapse are just two examples of how easily people get swept up in crypto hype. If you’re playing the crypto game, just assume that at some point, someone is going to pull the rug. And if you don’t know who the sucker is in the room… well, it’s probably you.
Crypto is full of wild opportunities, but for every success story, there are a dozen tales of people getting absolutely screwed. If you must play the game, do it with money you can afford to lose and always stay skeptical.
Stay informed, stay skeptical, and for the love of Doge, don’t bet your rent money on the next “to the moon” token.
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