Fame and failure: 7 celebrity-endorsed crypto scams that went wrong

As a seasoned observer of the digital world and its ever-evolving landscape, I must say that the tale of celebrity memecoins is both intriguing and concerning. Having spent years navigating the complexities of technology, finance, and public perception, it’s clear to me that these ventures often leave more questions than answers.

2024’s resurgence of the Bitcoin bull market is sparking investor enthusiasm once more, as savvy traders, known as ‘degenerates’, are jumping headfirst into the trend of meme-coins, seeking out high volatility and substantial returns in this cycle.

Capitalizing on potential, several celebrities have launched their own branded tokens, yet a significant number of them have encountered criticism and accusations of fraudulent activities.

As a seasoned crypto investor, I’ve noticed that during each market uptrend, celebrity endorsements in the crypto space seem to surface everywhere. These endorsements, often from individuals who are more famous than knowledgeable about blockchain technology, can sometimes leave me and other experienced traders feeling a bit cringy. The reason? They tend to make overly optimistic promises about token projects that are, frankly, unrealistic.

Although celebrities might increase a project’s visibility, their endorsement doesn’t ensure authenticity. Regrettably, even with a history of questionable returns, inexperienced investors remain susceptible to investing in celebrity-backed cryptocurrencies.

Previously, celebrities have endorsed crypto initiatives for financial gain or introduced NFT collections to capitalize on the trend. In the current cycle, platforms such as Pump.fun facilitate the effortless creation of memecoins that rely solely on community or hype, making them a straightforward method for launching celebrity-backed tokens, requiring no specific purpose.

Seven well-known figures once associated with tokens have seen those ventures falter, and some are now viewed as questionable investments, potentially leading to class-action lawsuits or legal action from regulatory bodies due to the celebrities’ involvement.

HAWK Tuah, scam that thing!

In 2024, Haliey Welch became well-known following a viral incident during an interview where she suggested a provocative approach to captivate men, saying, “You need to offer them the ‘hawk tuah’ and spit on it.” This statement swiftly spread throughout social media platforms.

In simpler terms, Welch realized the power of becoming viral, so she left her job and assembled a team to cash in on her sudden fame. She launched a product line called “Hawk Tuah”, collaborated with multiple brands, started her own podcast named “Talk Tuah”, and made numerous appearances with famous personalities.

In October, as the popularity of Hawk Tuah goods skyrocketed and the memecoin concept grew increasingly prevalent within the cryptocurrency community, the thought of launching her own memecoin began to take shape.

Following a thoughtful evaluation and playful recommendations, even one from renowned American businessman Mark Cuban on his podcast, the concept started to gain popularity, eventually resulting in the formation of the Hawk Tuah (HAWK) meme cryptocurrency.

Reflecting on my recent endeavors, the launch of HAWK on December 4 turned out to be far from ideal. Within just three hours, it plummeted a staggering 91% in value. This memecoin has faced accusations of manipulative practices such as sniping and insider trading.

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YouTube cryptocurrency analyst Stephen Findeisen, more famously known as “Coffeezilla,” refuted accusations of a rug pull but expressed disapproval towards the team for permitting a sell-off following a pre-sale. He characterized the memecoin’s launch as “one of the worst and most disappointing launches I have ever witnessed.

Legal advisors informed CryptoMoon that Welch and her group might be subject to accusations post the release of their memecoin, however, this would occur only if officials choose to act. Welch refutes the claims of fraud, and as of now, no probe has been initiated.

Andrew Tate’s DADDY pump-and-dump

As a passionate crypto investor, I’ve jumped on the bandwagon of the latest coin launch – Daddy Tate (DADDY), created by the well-known “masculinity” influencer, Andrew Tate. Inspired by the success of Iggy Azalea’s Mother Iggy (MOTHER) token, he aims to replicate that triumph with DADDY, positioning it as a beacon of male empowerment. The rallying cry for this coin is “flip it for the patriarchy,” encouraging us all to make our moves in the crypto world and contribute to the strength of our community.

DADDY has suffered many pump-and-dumps and remains far below its launch price.

Following the release of the token, an examination using the on-chain analysis tool Bubblemaps uncovered substantial signs of insider trading involving Tate’s token.

Early on, it’s possible that a significant portion (around 30%) of the tokens were obtained by individuals who are closely involved with the project, and these holdings were worth more than $45 million when they were acquired.

On June 9, it was observed that 11 wallets associated with Binance purchased approximately one fifth of the total supply of DADDY’s tokens, despite Tate not making any sales himself.

Purchases made on Binance preceded Tate’s promotion on X. These early acquisitions, suspected of being insider trades, allegedly set up some investors to reap substantial gains, sparking doubts about the token’s authenticity and impartiality.

Jack Doherty’s controversial livestream

Jack Doherty, a well-known streamer, has predominantly gained popularity on social media due to his notorious antics. Renowned for risky feats, suspected underhanded methods, and testing limits in pursuit of attention, he’s been subjected to criticism for prioritizing fame over moral principles.

On October 5th, he got prohibited from the streaming service Kick, as he allegedly wrecked a $200,000 McLaren while texting on his mobile phone during a live broadcast.

Crashed my McLaren… glad we’re both ok🙏❤️

— Jack Doherty (@dohertyjackk) October 5, 2024

On November 23rd, Doherty attempted to shift focus to other social media outlets due to a decline in revenue. This move sparked attention on platforms such as X and Reddit following user reports claiming that he conducted a “rug pull” live during his stream after introducing a memecoin.

In my analysis, it appears that I had amassed holdings of the memecoin McLaren (MCLAREN) across various digital wallets prior to intensely endorsing it on my live broadcasts. As I escalated the hype surrounding MCLAREN, the market value noticeably soared.

During a live broadcast, it appears that Doherty allegedly disposed of his assets, which led to a dramatic decrease in the token’s value – a common action known as “dumping.” Consequently, this move resulted in substantial losses for investors, while Doherty is said to have benefited financially.

Jack Doherty, a popular live streamer, has found himself in a sticky situation with his meme coin venture. He excitedly promoted this cryptocurrency on his live streams, which led many investors to jump on board. However, after accumulating investments, he suddenly sold off his holdings, causing the coin’s value to dramatically drop. To add insult to injury, he then removed all promotional material related to the coin from his platforms. 😮💰

— 🤖Durak the Robot (@Crypto_AI1212) November 23, 2024

After the occurrence, the individual aged 21 removed all marketing posts related to the digital currency, leading to intense backlash on social media with claims of an “exit scam”. Currently, no legal body or lawsuit has been initiated in response.

Sean Kingston’s crypto kingdom was dethroned

The Jamaican-American musician, Sean Kingston, rose to fame following the success of his song “Beautiful Girls,” which soared into the Top 100 charts and gained popularity worldwide.

On July 16, Kingston introduced its new coin called KING, starting with a market capitalization of $4 million. However, within minutes, the value plummeted to $400,000.

In May, Kingston found himself under arrest on numerous accusations of fraud and theft involving various businesses such as jewelry stores and car dealerships. It is claimed that he, along with his mother Janice Turner, were responsible for defrauding these establishments to the tune of more than half a million dollars collectively.

The charges include grand theft and organized schemes to defraud. Kingston’s mother was also arrested during a SWAT raid at their Florida mansion, where luxury goods were seized. This case follows prior legal trouble for Kingston, as he was on probation for trafficking stolen property.

For now, no lawsuit has been filed regarding the launch and collapse of KING.

Davido flipped his memecoin

On May 29th, the well-known Afrobeat sensation from Nigeria, Davido, introduced his very own memecoin, DAVIDO, onto the Solana blockchain platform.

11 hours before the launch, Davido got 7.5 Solana (SOL) as initial funding, equivalent to approximately $1,275 at that moment. He then registered “DAVIDO” on Pump.fun and used 7 SOL to buy 203 million DAVIDO tokens, representing around 20.3% of the total supply.

Not long after the token increased in value, he cashed out by selling all his tokens, earning approximately $500,000 from the sale of 7 SOL. Following this mass sale, the token (DAVIDO) lost its worth and became essentially worthless.

After the memecoin’s rapid crash, many fans and critics accused Davido of promoting a scam.

In simpler terms, Nigeria’s Securities and Exchange Commission (SEC) has issued a cautionary statement regarding memecoins, emphasizing that they are not associated with these digital currencies and urging the public to be aware of their potential risks. So far, no legal actions related to this matter have been initiated.

Davido may not have legal authorities chasing him, but the scandal has damaged his reputation.

Caitlyn Jenner and Jason Derulo memecoin victims?

American pop artist Jason Derulo and Caitlyn Jenner, a renowned Olympic champion and TV celebrity in the U.S., both chose to create their unique meme-based cryptocurrencies, yielding comparable results.

In June of 2024, Derulo introduced JASON (Jason) following a successful social media promotion that generated considerable initial interest. Unfortunately, the value of the coin dropped more than 70% almost instantly, which triggered criticism from investors.

Jason Derulo alleged that Sahil Arora, a well-known figure in the cryptocurrency world and a co-creator of certain meme coins, manipulated the market by executing a “buy high, sell high” strategy to enrich himself illicitly.

“Despite his claims, we doubt Jason Derulo got fooled by Sahil,” Bubblemaps posted to X on June 24.

Bubblemaps discovered wallets, allegedly linked to Arora, containing approximately half of JASON’s total supply. These wallets appeared to have offloaded nearly all their tokens following Derulo’s initial post about the token, resulting in a profitable gain of around $180,000.

According to Bubblemaps, there’s evidence suggesting that Derulo received cryptocurrency tokens from Arora’s wallet, which were then sold for approximately $20,000. This contradicts Derulo’s claims in at least three posts on X, where he stated emphatically that he would never sell his tokens.

In a similar fashion, Jenner collaborated with Arora for the debut and marketing of the JENNER memecoin. Originally introduced on Solana, it was eventually transferred to Ethereum. However, following substantial trading, the token’s worth drastically declined.

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Jenner and Derulo alleged that Arora misled investors by not revealing crucial details like personal token holdings and potential risks, and by participating in unjust trading activities, such as selling significant amounts of tokens following their public promotion.

In both situations, the allegations revolve around suspected token price manipulation, deceptive advertising, and possible profits obtained by exploiting investors. This has led to a wave of public criticism.

Jason Derulo’s situation seems to have tarnished his public perception, despite no official charges being brought against him. On the other hand, Caitlyn Jenner is currently embroiled in a lawsuit that alleges she and her business partner, Sophia Hutchins, have deceived investors, both in the U.S. and abroad, by persuading them to invest in unregistered securities without proper disclosure, which could be considered fraudulent.

Even though celebrities might have earned popularity due to their skills, their participation in cryptocurrency ventures doesn’t automatically make them legitimate or profitable. Experienced crypto enthusiasts frequently see celebrity endorsements as warning signs.

2024-12-11 17:18