So You Lost Your Life Savings To Hawk Tuah

A couple of evenings ago, I treated myself to a couple of jars of Loudmouth Soup at a local watering hole. As I tottered back home to my disappointed family (a set of brooms I have set up in the living room and painted disappointed yet painfully hopeful faces on), I passed the answer to all of life’s problems :  a slowly rotating mound of meat illuminated by hospital lighting, or in other words, a kebab.

Leaving the fine dining establishment, I felt physically lighter for the £6 they had taken off of me for the pleasure(?) of the mystery meat, and as I chewed that feeling over (as well as the indiscriminate bits of face and hoof in my kebab), I thought to myself : well at least I didn’t lose my children’s college fund betting on Internet money created by a person who got famous for simulating spitting on *redacted*!!

If that sentence is confusing to you: I’m genuinely happy for you. Seriously man, well done. Put down your phone or laptop, hug your family, feel the rain on your skin and remember, no one else can do it for you, only you can let it in.

Or you can linger a while longer in the mire of memecoins, which is what I’m talking about, specifically Hailey Welch, professionally known by her nom de guerre as Hawk Tuah (and as I found out whilst writing this, has a Wikipedia page because what is reality any more), and her recently launched cryptocurrency that many is claiming is a massive scam directed at whoever is stupid enough to buy into a cryptocoin from an influencer of her ilk. 

Right off the bat, I went to call $Hawk a ‘failed cryptocurrency’ but I realise verbiage like that is wrong, because for all intents and purposes, it was a huge success! It’s just the intents and purposes were to f*ck over as many people as inhumanely possible in a shorter time frame as humanely possible.

There are essentially two things I wanted to write about when it comes to $Hawk, the first being the exact mechanisms behind how it works and then what is it about 21st century culture that means these things just keep happening.

How did $Hawk crash?

Simply put, the market capitalization of $Hawk fell from a high of $500 million to just $25 million in under a few hours, meaning that those poor suckers who bought at the ‘high’ were left ‘holding the bag’, with their holdings of a coin that they bought at a significantly higher price than it is currently worth. So far, so straightforward.

However, the shady part is exactly why this drop happened. 

Cryptocurrencies’ are essentially worthless: they’re worth whatever the market dictates and aren’t (with the exception of stablecoins) backed by any real currency. This makes them incredibly susceptible to things called Rug Pulls. 

A crypto rug pull occurs when developers of a cryptocurrency or decentralized project artificially inflate the value of their token or attract liquidity through hype, often holding a large % of the coin themselves, or divvying the coin amongst insiders through a ‘presale’ which the general public cannot participate in. They then abruptly sell off their holdings or remove liquidity, causing the token’s value to plummet and leaving unsuspecting investors with significant losses.

$Hawk has all the classic hallmarks of a crypto rug pull. 

CoinTelegraph reported about 80 to 90% of the Hawk Tuah supply was controlled by insiders or snipers (people who quickly buy and then sell coins to make a quick buck). This massive centralisation means that when these insiders ‘dump’ their coin, they make a tonne of money whilst simultaneously draining the value of the coin. One of these ‘snipers’ (impossible to tell if they are related to Hawk Tuah or not) managed to get their hands on 17.5% of the supply of $Hawk, worth $993,000 at the time. Over the next 90 minutes, this user sold these 135.8 million HAWK tokens for a tidy profit of $1.3 million. 

Whilst Hailey Welch claims her team ‘have not sold a single token’, they are raking in money on transfer fees (an unusually high 15% per transaction) irregardless of the dubious claim that they didn’t sell anything. According to Coffeezilla (a YouTuber who investigates crypto scams), transfer fees netted around $2 million dollars at the time of writing. Who, exactly, has that money is impossible to tell, but the salient points are that someone made a tonne of money, whilst most of Hawk Tuah’s fans have ended up losing a tonne of money.

Why did $Hawk happen and why is it bad?

After all this, I still find it hard to hate the Hawk Tuah girl. She’s considerably younger than myself, and became mega-famous for a 7 second clip from a drunk interview she gave on a random Tennessee night out. It happens to the best of us.

She’s also not the first influencer to utilise complex financial instruments to shake some coins out of her fans pockets, and certainly won’t be the last. 

But why does this keep happening? Why do influencers keep getting away with doing the same crimes that in any other market would get you sent to prison?

Firstly, legislation is super lagging on crypto crimes, as crypto itself is both heavily unregulated as well as incredibly resistant to regulation. I sympathise with crypto-enthusiast’s will to keep government oversight away from their anarcho-capitalist pipe dream (I was originally a Bitcoin proponent, but have soured as of late, which you can read a bit more about here). This lack of legal oversight makes it possible (and technically legal) for influencers to make massive amounts of cash with almost minimal effort (Hawk Tuah launched her coin through an agency and is speculated to have basically no idea how it even works).  

The second big (and most important) reason is it has become morally permissible in modern times to behave like this. Our morality is inextricably linked to ‘consequence’ and the fact that we see influencers do pump and dump schemes without legal consequence, is instilling a sense that these things are inevitable. There have been hundreds of crypto scams featuring famous people from across the world, and yet an almost astounding lack of followup. 

No one goes to jail. 

No one has to give any money back.

Mostly, everyone keeps their shiny cars and sponsorships, and gets to keep marketing their terrible energy drinks to children.

It seems that if you do and pump and dump, you can simply turn your phone off for four days, and you wouldn’t even know people were mad at you, because by the time you switch it back on one of your ilk will have done a different, even bigger rug pull.

With this lack of tangible consequence and the repetitiveness of these scams, we have come to expect very little of the rich and famous, as if the legal barrier is the only reason to do the moral thing. 

But it reflects something even darker: we’ve come to expect even less of ourselves too. 

Sweeping populism and anti-science rhetoric is the dish of the day, and this individualistic, base drive is being reflected back at us with influencers who mirror our own worst qualities: if your ‘net worth’ graph is up and to the right, then all is swell and no one can blame you for ‘getting the bag’. 

We’re decades deep into the cult of the celebrity, and there’s a small part of us that looks at a 22 year old scamming her fans for millions of dollars and thinks ‘maybe if I could get away with that too, I would’.

If we want to stop this madness, we must first hold ourselves to a higher standard, be confident that we would never abuse power in such a way and probably stop listening to the Talk Tuah podcast, as hard as it may be.