Rug pull in crypto explained as Hawk Tuah memecoin collapse affects crypto community

The term "rug pull" has gained significant attention in the cryptocurrency world following the sudden collapse of the Hawk Tuah memecoin, which left investors shocked and bewildered.

On December 4, 2024, Hailey Welch, also known as the Hawk Tuah Girl, launched the much-anticipated $HAWK meme coin on the Solana blockchain. However, just 20 minutes after its debut, its market capitalization saw a dramatic drop, prompting users on X to label it as a rug-pull scam, as reported by Coin Gape. Many netizens expressed their reactions to the incident.

"Whoever fell for this scam is an actual idiot by the way if you thought that Hawk Tuah coin was actually going to make you any money you deserve to have your money stolen," one commenter wrote.

"Hawk Tuah girl 'Hailey Welch' rug pulled her fans with her new meme coin & made over $3M within 24 hours…One fan invested $1.4M & came out with $46,000 💀," another user shared.

"Whoa the Hawk Tuah Coin ended up being a rug pull," one more wrote on X.

"I'm not in crypto but if you got rug pulled by the Hawk Tuah girl the day $BTC reached 100K then probably this game isn't for you," another person commented on X.

According to CoinBase, a rug pull refers to a type of scam in the cryptocurrency and NFT space, where developers promote a project to potential buyers, only to vanish or suddenly withdraw funds, leaving investors with worthless tokens.

Rug pulls can be categorized into two main types: hard and soft. Hard rug pulls are abrupt and severe, resulting in a rapid loss of assets for investors. On the other hand, soft rug pulls unfold over a longer period, with the developers creating a false sense of security while quietly shutting down the project.

CoinBase further identifies four primary categories of this scam. The first is Liquidity Pulls, where the creator removes liquidity from the token pool. The second is Fake Projects, which involve deceptive schemes presented as legitimate ventures.