From "Spitting Eagle" to Trump: Crypto Assets are Experiencing the Collapse of the Trust Chain

Celebrity endorsement tokens have become a typical case of industry chaos due to the lack of professional risk assessment and legal compliance, calling for strengthened regulation and awareness of responsibility.

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

Written by: Dr. Tonya Evans

Compiled by: Daisy, Mars Finance

The SEC has let the "Spitting Eagle Girl" off the hook, but the $HAWK coin she issued has exposed more serious issues.

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

In the subsequent class action lawsuit, Welch faced no formal charges, but her personal brand has suffered a major blow. Although she issued a public statement blaming the plunge on robotic manipulation and promised to "fully cooperate" with lawyers to assist affected investors, the 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 seen as speculative behavior. However, these reports often overlook the real systemic flaws beyond the bubble of the crypto industry: where is her advisory team? In this era of digital ownership, facing fast-paced, ever-evolving, and uncertain new monetization methods, where are the professionals who should be providing expert 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 agent, manager, PR team, and legal advisors. At least, theoretically, it should be.

Responsibilities of the Forgotten Advisory Team

The business of celebrity management goes far beyond just negotiating film contracts and arranging schedules; its core lies in opportunity recognition, maximizing profits, and reputation management, while also minimizing, mitigating, or avoiding risks as much as possible. This requires not only assessing the scale of returns but also weighing the specific terms of each collaboration, the impact of public opinion, and the costs to reputation—especially in the field of cryptocurrency, which is characterized by high volatility and significant legal risks.

Entertainment lawyers should be adept at identifying the red lines in intellectual property and endorsement contracts; agents should have 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 continue to witness the same pattern repeating: celebrities recklessly dive into the wave of cryptocurrency issuance, completely unaware of how securities laws apply and having no concept of the consequences following 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 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 industry malady: the consulting team treats cryptocurrencies as ordinary peripheral goods, not realizing that their essence is that they are strictly regulated financial products.

Cognitive Displacement and Product Misjudgment

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

In this field, a lack of risk awareness is by no means an excuse for exemption. Promoting these assets recklessly without compliance disclosure and failing to meet regulatory requirements is not only foolish and rash but may also be suspected of being illegal and could jeopardize one's career.

Trustworthy Trading

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

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

This raises a deeper question: the essential difference between pure meme coins and celebrity endorsement tokens. Most meme coins are driven by community and cultural hot spots, often designed absurdly, relying on a shared sense of humor on the internet 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. These Tokens are no longer about internal jokes within a community, but are more linked to individual credibility, reputation, and perceived influence. This is no longer a simple speculative game, but rather a marketing behavior disguised as market momentum.

This is contrary to the original intention of Bitcoin. The birth of Bitcoin was meant to eliminate reliance on trust in institutions or individuals; it established 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 cryptocurrency. They reintroduce the old mechanisms that Bitcoin aimed to circumvent.

Indeed, "buyer beware" is the truth, but "sellers (and their teams) must be more vigilant" is the ultimate truth. When hype replaces substance and influence overrides integrity, it is not only the market that suffers but also the mission of the entire industry.

Another Risk: When the President Sets the Worst Example

To complicate matters further, the highest authorities in the United States are now complicit in the high-risk behavior that experts have long warned about. A FEW DAYS BEFORE HIS SECOND INAUGURATION, PRESIDENT DONALD TRUMP UNVEILED TWO FAMILY-BRANDED MEME COINS – FIRST THE TRUMP COIN AND THEN THE MELANIA COIN NAMED AFTER HIS WIFE. The launch of the two tokens comes with a comprehensive pro-crypto policy agenda that includes proposals to reverse previous SEC enforcement actions and establish a "strategic bitcoin reserve."

Although legitimate, this dual status of individual promoter and national policymaker 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 norms for others, let alone 25-year-old influencers.

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

Whose responsibility is this?

Chasing 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 those highly-paid professional consultants who should be the most vigilant.

Attention brokers, managers, and lawyers: 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, it is your obligation to seek out knowledgeable experts.

The explosion of the "Spitting Eagle Girl" incident was not due to Welch's reckless advance, but rather that no one around her stopped to ask: "What exactly are we selling? What is the worst outcome?"

If we could answer this question honestly and early, the outcome might be completely different.