While celebrities can raise a project’s profile, their involvement does not make the project legitimate. In fact, celebrity-backed projects fared terribly in previous cryptocurrency cycles. Still, inexperienced investors have continued to believe in these projects despite repeated failures.
Even without a practical use case, platforms like Pump.fun make it easy to introduce memecoins. That has led to a slew of highly publicized failures and alleged scams. Here are five notable examples of when tokens backed by celebrities went awry.
1. Haliey Welch’s Hawk Tuah Token
Haliey Welch became famous for a viral comment during an interview. Riding her newfound fame, she launched a memecoin called Hawk Tuah (HAWK). Despite lighthearted endorsements, including one from Mark Cuban, the token’s launch on December 4 turned disastrous.
- Launch Failure: HAWK lost 91% of its value within three hours.
- Allegations: Accusations of insider trading and sniping surfaced.
- Response: Crypto investigator “Coffeezilla” criticized the launch but denied it was a rug pull.
- Current Status: No investigation has been announced, but Welch’s reputation has taken a hit.
2. Andrew Tate’s DADDY Token
Andrew Tate, a controversial influencer, launched Daddy Tate (DADDY), claiming it symbolized male empowerment. Despite initial hype, the token fell victim to pump-and-dump schemes.
- Insider Trading: Onchain analytics revealed insiders held 30% of the token’s supply, worth $45 million.
- Unfair Practices: Large purchases were made before public promotion, raising concerns about integrity.
- Current Status: Although Tate didn’t sell his tokens, the project lost credibility.
3. Jack Doherty’s McLaren Token
Streamer Jack Doherty used his controversial fame to launch McLaren (MCLAREN). Known for reckless stunts, Doherty’s token quickly turned into a scandal.
- The Rug Pull: Doherty allegedly bought tokens with multiple wallets, hyped them on livestreams, then sold off his holdings, crashing the price.
- Public Outrage: Social media backlash was immediate, but no legal action has been taken.
- Result: Doherty deleted promotional content, leaving investors with losses.
4. Sean Kingston’s KING Token
Sean Kingston, famous for his music, entered the crypto space with the launch of King (KING). Despite an initial market cap of $4 million, the token crashed within minutes.
- Legal Troubles: Kingston faced fraud charges unrelated to the token, involving over $500,000 in stolen goods.
- Current Status: KING’s collapse added to his existing legal issues, further damaging his reputation.
5. Davido’s Memecoin Flop
Afrobeat star Davido launched a Solana-based memecoin named Davido (DAVIDO). The token crashed shortly after its release.
- Token Flip: Davido spent 7 SOL to buy 20.3% of the supply and later sold for $500,000, leaving the coin worthless.
- Public Warning: Nigeria’s SEC issued a caution about memecoin risks.
- Impact: While no legal action has been taken, the incident harmed Davido’s image.
Lessons from Celebrity-Endorsed Crypto Scams
Celebrity involvement in crypto can lure inexperienced investors, but it rarely guarantees success. Below are some key takeaways:
|
Warning Signs |
Explanation |
|
Hype Over Substance |
Projects relying on celebrity status instead of utility are often risky. |
|
Insider Trading |
Large pre-launch purchases by insiders indicate potential manipulation. |
|
Pump-and-Dump Schemes |
Tokens that rise and fall rapidly may involve coordinated dumps. |
|
Lack of Transparency |
Limited information about the project’s goals or team is a red flag. |
|
Regulatory Warnings |
Tokens flagged by financial authorities should be approached with caution. |
Celebrity-endorsed crypto projects continue to attract attention but remain fraught with risks. Experienced investors often view these tokens as red flags, not opportunities.