From "Spitting Eagle" to Trump: Crypto Assets are experiencing a collapse of the trust chain.

Original Title: The SEC Gave Hawk Tuah Girl a Pass But Her $HAWK Coin Exposed a Bigger Problem

Original Author: Dr. Tonya Evans

Source of the original text:

Compiled by: Daisy, Mars Finance

The SEC let "Spit Hawk Girl" off the hook, but the $HAWK coin she issued exposed a more serious problem.

In December 2024, when the meme coin $HAWK, endorsed by the internet sensation Hailey Welch (better known by her controversial nickname "Spitting Eagle Girl"), was launched, this meme frenzy instantly ignited the market. Within just a few hours, the token's market value soared to nearly $500 million, but then it crashed at an even more astonishing rate, with over 90% of its market value evaporating, leaving thousands of retail investors with significant losses.

In the subsequent class action lawsuit, Welch has not faced formal charges, but her personal brand has suffered significant damage. Although she issued a public statement blaming the crash on robot manipulation and promised to "fully cooperate" with lawyers to assist affected investors, this incident quickly became a typical case of conflict between celebrity brand monetization and cryptocurrency regulation.

Post-analysis often focuses on Welch herself: her age, lack of experience, and her shift from a cryptocurrency critic to an active promoter—these are all viewed as speculative actions. However, these reports often overlook the real systemic vulnerabilities outside the cryptocurrency industry bubble: where is her advisory team? In this era of digital ownership, facing new monetization methods that are fast-paced, constantly evolving, and filled with uncertainty, where are the talents that should be providing professional support at all times?

Because the facts are obvious: Hailey Welch is not a lawyer, not a securities expert, and certainly not an insider in the cryptocurrency space. We should not have had such expectations of her—this should have been the responsibility of her agents, managers, PR team, and legal advisors. At least, theoretically speaking.

Responsibilities of the Forgotten Advisory Team

The celebrity management business is far more than just negotiating film contracts and arranging schedules; its core lies in opportunity identification, revenue maximization, and reputation management, while also minimizing, mitigating, or avoiding risks as much as possible. This not only requires assessing the scale of benefits but also weighing the terms and details of each collaboration, the impact of public opinion, and the costs of reputation—especially in the highly volatile and legally risky area of cryptocurrency.

Entertainment lawyers should be skilled in identifying the red lines in intellectual property and endorsement contracts; agents should possess the keen insight to recognize high-risk brand collaborations; managers should maintain a holistic view of their clients' public image and career development trajectory. However, in transaction after transaction, we repeatedly witness the same pattern: celebrities recklessly dive into the cryptocurrency issuance wave without any knowledge of how securities law applies, or even any concept of the consequences after a project collapses.

The case of Welch is just the tip of the iceberg. Kim Kardashian, Floyd Mayweather, and DJ Khaled have all been fined by the SEC for promoting crypto tokens without disclosing their compensation; Tom Brady and Gisele Bündchen were collectively sued by investors for endorsing FTX; even Matt Damon, who was not involved in any lawsuits, faced brand backlash for filming the "Fortune Favors the Brave" ad during the collapse in 2022.

This is by no means an isolated incident, but rather exposes a deeper chronic problem in the industry: advisory teams treat cryptocurrencies as ordinary peripheral products, not realizing that their essence is that they are strictly regulated financial products.

Cognitive dislocation and product misjudgment

An increasing number of celebrities and influencers are forming a fatal illusion - that cryptocurrency tokens are just a new type of fan interaction tool following NFTs, limited merchandise, and sponsored content. However, the attributes of tokens are vastly different: when a certain token meets the securities standard established by the Supreme Court's "Howey Test" in 1946, the promoters will bear significant legal responsibilities.

In this field, a lack of risk awareness is by no means an excuse for exemption. Promoting these assets recklessly without conducting compliance disclosures and meeting regulatory requirements is not only foolish and reckless but may also involve legal violations and jeopardize one's career.

Trust Trading

The anti-touting provisions in U.S. securities law aim to protect investors—especially when promoting investment products for compensation—by requiring clear and fair disclosure of information. In this era of viral spread, where a single tweet can trigger millions of dollars in speculative buying, these rules are particularly important.

The SEC does not look at intent, only at results. If someone promotes an investment (i.e., people expect to profit through the efforts of others) without proper disclosure or there is misleading information, that is a regulatory issue. While it is often celebrities who publicly bear the consequences, the real wrongdoers are often the advisory teams that failed to conduct due diligence or are completely indifferent.

This leads to a deeper question: the essential difference between pure meme coins and celebrity endorsement tokens. Most meme coins are driven by community and cultural hotspots, often designed absurdly, relying on a shared sense of humor rather than implied utility or investment returns to sustain themselves.

They are indeed high risk - but the risks are transparent.

The operational logic of celebrity endorsement tokens is completely different. They carry implicit trust commitments borrowed from celebrity brands, which fundamentally changes the game rules. These tokens are no longer about inside jokes among a collective, but are more linked to personal credibility, reputation, and perceived influence. This is no longer a simple speculative game, but rather a marketing behavior disguised as market momentum.

This goes against the original intention of Bitcoin. The birth of Bitcoin was meant to eliminate reliance on trust in institutions or individuals, establishing a peer-to-peer system where value can be verified through code (rather than personal charisma). From this perspective, celebrity coins are not only a poor investment choice but also a betrayal of the founding philosophy of cryptocurrencies. They reintroduce the old mechanisms that Bitcoin aimed to circumvent.

That's right, "buyer beware" is the truth, but "sellers (and their teams) need to be more vigilant" is the real essence. When speculation replaces substance, and influence oversteps integrity, it is not only the market that suffers, but also the entire mission of the industry.

Another risk: when the president sets the worst example

What makes the situation even more complicated is that the highest power in the United States is now also participating in the high-risk behavior that experts have long warned about. President Donald Trump launched two family-branded meme coins just days before his second inauguration: first TRUMP coin, followed by MELANIA coin, named after his wife. The launch of these two tokens is accompanied by a comprehensive pro-cryptocurrency policy agenda, which includes proposals to rescind previous SEC enforcement actions and establish a "strategic Bitcoin reserve."

Although legal, the dual identity of such individual promoters and national policymakers raises serious questions about regulatory neutrality. When the lines between private financial interests and public policy begin to blur, it becomes increasingly difficult to set clear standards for others—let alone for a 25-year-old internet celebrity.

However, the answer is far from being passive. We need to call on those behind the scenes—those who should assess risks, provide advice, and ensure safety rather than just seek profit—to take on greater responsibility and demonstrate higher professionalism.

Whose responsibility is this?

Chasing the trends is precisely how celebrities maintain their commercial value. However, when it comes to financial products—especially speculative assets like meme coins and stablecoins—it is precisely the highly paid professional advisors who should remain the most vigilant.

Brokers, managers, and lawyers please note: If you fail to protect your clients from reputational and legal risks, that is a serious dereliction of duty. If your understanding of cryptocurrency is not sufficient to raise critical questions, then it is your obligation to seek out knowledgeable experts.

The "Spitting Eagle Girl" incident did not explode because of Welch's reckless advance, but because no one around her stopped to ask: "What exactly are we selling? What is the worst-case scenario?"

If this question could be answered honestly and early, the outcome might have been completely different.