Bradley Valentin 
Should we have ever trusted someone who became famous for a viral sex joke? Let’s just go ahead and answer that question now: NO. We recently discussed the growing popularity of scam coins and how to protect yourself, but now more than ever, as the world of cryptocurrency grows, so will the growing pains of sifting through these scams and rug pulls.
Cryptocurrency Can Be Legitimate
While scammers and get-rich-quick artists look to take advantage of the hopeful, there are still legitimate options for those who look to invest in the future. Bitcoin is currently seeing a massive surge, especially since mid-November 2024. The price is so high that some may see it as a non-starter because it’s too expensive. Others may view the high price as something that shows the legitimacy of the currency and that while it’s still expensive, it has room to grow.
Bitcoin is up 122% in the last 12 months.
Ethereum is another cryptocurrency, which many view as a legitimate alternative to Bitcoin. Currently priced around $3,800/coin, Ethereum has seen extensive growth within the last five years (+2,470%). Ethereum does provide a structure for creating new cryptocurrencies, which could be a good thing, but could also leave a door open for those who are looking to use the structure for rug pulls.
Rug Pullers Are Getting Bold
Rug pulling is becoming more and more common, while celebrities and scammers are becoming more and more bold. Hailey Welch, who became famous for her internet “hawk tuah” video, recently released HAWK coin. Internet scam-exposer Coffeezilla quickly was on top of the scam with his video exposing Welch and her rug-pull tactics. While Welch has denied this being a scam or rug-pulling, it was clear that she and her team were looking to take advantage of those unaware of cryptocurrency’s interworking (or investments in general).
People like Hailey Welch use their celebrity to take advantage of their followers and fans in order to make fast, large sums of money. While Welch and other celebrities likely do not do the work it takes on the back end to create their coins, they are likely sold on making money by getting their followers to invest. Once they have enough investors, they start the rug pull. They quickly sell off their holdings in the coins and make money. Welch and her team did this in early December 2024, right as the coin went live. The team made tens of millions of dollars as the coin was valued at nearly half of a billion dollars, only to be valued at a few hundred thousand dollars shortly after.
Is Rug Pulling Illegal? How Do We Stop It?
Unfortunately, for those who have had their money taken from celebrities like Hailey Welch, rug pulling as we have described it is not illegal. Anyone can make a cryptocurrency or coin, and, as the value increases, pull out for a huge profit. Just recently, a crypto coin QUANT became a viral sensation when a teenager live-streamed a rug pull. After his coin went live, he had about $20k worth of the coin, and he quickly pulled live while streaming, leaving those who brought the price up with a nearly worthless coin.
Actions like these are not illegal, and creators of coins have the right to rug pull. This is what makes some cryptocurrencies so risky. Bitcoin has millions of owners, and while it is still relatively new and volatile, it lacks the volatility of celebrity junk coins. The best way to battle against these coins and scams is to stay financially educated and avoid investing in the latest trend. Cryptocurrency can be legitimate, but it is important to stay informed and educated before you make your investments.
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