CRYPTOCALYPSIS 2025! Nike, Hawk Tuah, and LIBRA Coin: The Celebrities and Brands Leading the New Wave of NFT Scams and Million-Dollar Rug Pulls

From the shocking lawsuit against Nike over the alleged "rug pull" of its NFT project RTFKT, to the meteoric collapse of the Hawk Tuah coin and the LIBRA Coin scandal that has engulfed the highest political echelons, at MASCHISME.com we investigate how fame and prestige are being used to inflate speculative bubbles, leaving fans and followers empty-handed and pockets stuffed with worthless tokens. Welcome to the crypto debacle!

The first giant to fall under the scrutiny of corporate crypto fraud is Nike. The iconic sports brand is facing a class-action lawsuit in New York after abruptly shutting down operations of RTFKT (pronounced "artifact"), its ambitious NFT and digital collectibles project, in December 2024.

What the plaintiffs call a "blatant rug pull" has left buyers with digital assets whose value has evaporated virtually overnight. Nike had acquired RTFKT in December 2021, generating tens of millions of dollars in revenue through the sale of these NFTs and a gamified ecosystem that promised exclusive rewards. With the shutdown, those promises went up in smoke.

The lawsuit not only alleges a "rug pull," but also that Nike's NFTs were, in essence, "unregistered securities" sold in violation of federal and state laws, an argument that could set a dangerous precedent for other brands entering the NFT space.

Another case that illustrates the volatility and dangers of fame-driven currencies is that of the Hawk Tuah Coin. Associated with viral TikTok personality Haliey Welch, known as the "Hawk Tuah girl," this memecoin plummeted within hours of its launch.

Accusations of "rug pull" immediately arose, with critics and those affected pointing out that project insiders had benefited from the initial hype only to disappear with the profits, leaving smaller investors in the lurch. Although Welch and his team denied selling their tokens and claimed that the project was seeking to combat copycats selling counterfeit tokens, the damage to trust had already been done.

But perhaps the most explosive and far-reaching scandal is that of the LIBRA Memecoin. Initially promoted almost as Argentina's official cryptocurrency, LIBRA collapsed spectacularly, wiping out billions of dollars in investor funds and shaking both the Argentine crypto market and its political scene.

Argentine President Javier Milei now finds himself in the eye of the storm, facing severe legal scrutiny and possible impeachment proceedings for promoting LIBRA on his social media. Opposition lawmakers argue that his endorsement misled investors, artificially inflating LIBRA's value before insiders liquidated their positions, leaving some 74,000 traders with an estimated $286 million in losses.

Even figures like Dave Portnoy, founder of Barstool Sports, were involved, losing millions and then receiving a strange "compensation" that fuels suspicions of insider dealing.

These are not isolated incidents. It's worth remembering that the U.S. Securities and Exchange Commission (SEC) has already taken action on this matter in the past, fining celebrities such as Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Lil Yachty, Ne-Yo, and Akon for promoting cryptocurrencies and tokens without disclosing that they had been paid to do so. These cases set a clear precedent for the responsibility public figures bear when endorsing financial products, no matter how novel or "decentralized" they may seem.

And the threat continues to evolve. Cybersecurity experts warn that scammers are increasingly using Artificial Intelligence (AI) to enhance their scams: from creating automated pump-and-dump schemes and generating fake or "copycat" tokens, to impersonating celebrities to promote fraudulent investments in cryptoassets.

The recurrence of these "rug pulls" and deceptive promotion scandals involving celebrities, influencers, and now even corporations such as Nike not only demonstrates an alarming lack of due diligence or, worse, questionable ethics. It also suggests that we could be witnessing the bursting of a "credibility bubble" in the fame-driven digital asset space.

As more and more investors become burned, the effectiveness of celebrity endorsements for these inherently volatile products could decline dramatically. This could force a radical shift in crypto projects' marketing strategies or, more likely and necessary, much stricter and more coordinated regulatory intervention at the global level.

The "meta-farce" lies in the fact that the utopian promise of decentralization and financial democratization that many crypto projects champion often ends up enriching a well-connected few at the expense of the naiveté and FOMO (fear of missing out) of many, with celebrities acting as expensive—and sometimes complicit—digital smokescreens.