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Call Zone Media welcome back to 16th minute, the podcast where we take a look at the Internet's main characters and see what their moment says about us and the Internet. And I'm your little host, Jamie Loftus, taking a little bit of a bonus victory lap here after we wrapped our recent series on Haley Welch, AKA the Hawk to a Girl. And with these longer series, there usually ends up being a few interviews or sections that end up getting cut for time. But there are some interviews that are simply too special to leave. And when it came to understanding the hawkcoin crypto scam, I needed all the help I could get. And thankfully, my pals who know about it were right there for me. So today, a little bonus a conversation with Cool Zone's own Ed Zitron. Hopefully you know who Ed is already he's the host of the wonderful tech podcast Better Offline and the mind behind the popular where's your Ed at? Newsletter. He's also one of the funniest people I know, and I delighted in torturing him into telling me what crypto scams mean. Here's my conversation with Ed.
A
Well, I'm Ed Zitron. I'm the host of Better Offline, the Cool Zone media tech podcast. I have watched so many crypto scams happen. One time, a friend of mine was working on a paper for law school about rug pulls and said to me, ed, have you seen a rug pull recently? I said, I'm watching one right now.
B
Do you remember which one it was?
A
It was called Apecoin, and it was on the Polygon blockchain Molly and I were talking about.
B
She was like, this is a very straightforward rug pull. The only reason we're talking about it is because it's hawk to a girl and everyone thinks she's funny.
A
That and also it was fairly egregious. The market cap, and the term market cap, as I'm sure Molly's been over, is kind of a misnomer. It just means the value of the coin times the amount of tokens that are available. So at one point, it was like half a billion dollars value. And then it crashed after the rug pull happened. But, yeah, the only remarkable thing is that this person is famous. There is somebody that has now had to say to their wife, hey, honey, I've got some bad news. And it's about our 401k and about Hawk tour. It's such a weird world we live in because there is some. Some romanticization like this. The. A regular person who was kind of vilified for just making a regular garden gross thing that people say all the time on the Internet with someone who. Who would talk about a hawk toing on that thing. I believe, as she once said once.
B
But it's hearing it in the accent.
A
Yes, it's. That's how you say it. I think someone made a really good comment on Twitter about it, saying that if Ellen was still around, Ellen would have taken this woman down in fifth. She got 15 minutes of fame on the Ellen show and then done.
B
For all of Ellen's crimes, she really did make sure the fame remained contained.
A
I think that the hawk tour thing is a wider phenomenon as well. You're seeing it with the horrifying Costco children as well. We're just everything. Everyone is so desperate. Like, I have some empathy for these people as well. Everyone's so desperate to try and find any way in, because just working a regular job is not sufficient enough to like rent a house, let alone buy one in many metros. So they of course will see this opportunity and they'll juice it as much as they can. But at some point there are other people who would like to juice it too. And I think that's how we got to hawk coin. Just. Jesus Christ.
B
I think what is kind of surprising me about not just this story, but a lot like it is sort of the inherent cynicism that there is to these schemes of like, yes, you're obviously being grifted, but if you get on the ground floor of this grift, you can grift others just like me.
A
Exactly. You can ride this grift. Cause I'm sure that's what most people thought. Her whole thing is that she is clearly doing a grift. We all know it's a grift. But by joining the grift, we too could grift with others. But then we become the griftee. And it's, it's a sick society. But it really is a sign of a sick society, because in a functional society this would not be possible. But also this would be immediately like, people would just like, I'm not touching this. People knew and still did.
B
It's rough where they're like, no, I'm fine with scams. I just didn't think I was going to be the victim of this one. And now I'm mad.
A
You're like, okay, yeah, exactly. Like, I thought I was smarter than the people that I was conning by proxy.
B
When did this style of grift start?
A
I mean, which kind? Because. Are you talking about the celebrity one or just the crypto rug pull one?
B
Let's just start with the rug pull.
A
So it goes back to like the mid 2010s when you had something called an ICO, an initial coin offering, which just means, hey, I am going to build a company. I'm going to start by selling a token and there will be a certain amount of tokens that go out and you can buy in at the pre sale level and you will get the lowest price. And then when it hits exchanges, so a place you can sell or buy cryptocurrency, really referring to the big ones. Binance at the time, FTX at the time. And, and of course Coinbase et al. The goal is that you get in early. It was initially sold as some sort of noble thing, some part of decentralized software. There was a Famous one called filecoin, for example, where ostensibly you would be investing in the early toke that would allow you to use the decentralized Dropbox. You may be thinking, I already have Dropbox. Why would I need this? And the answer is, I don't know. Now, the ICO craze was very big because it was an easy way of getting in low and selling high for the people that were inside of trading. However, this was the genius of the rug pull. I'm sure that there are other ones before it, but the ICO craze is one that was very big. And then the bottom fell out of the crypto market. 2017, 2018, that kind of went away. Now, at that point, we'd seen the growth of decentralized exchanges. So instead of it being, I am selling into a market controlled by a big party that's ostensibly trustworthy, I am now selling to another person. And there are all sorts of bots involved in this as well. So you started to get the classic rug pull, which would be, I have put together a white paper, which is just a very long document that claims that the token will work like this, and this is how these tokens will eventually operate within a company. And then you invest in this, much like an ico, and then when we put it on an exchange, it will sell for lots of money and blah, blah, blah. The goal of these platforms is very rarely to build anything. It's to get a bunch of money, and then the owners start selling off the tokens. People became more aware of this. So people started watching the blockchain and saying, well, wait, you're selling all the tokens. So over time, rug pulls became a little less easy to pull off because there are really insanely clever people watching. It's a very simple system, which is we. We as an entity promise to sell you tokens at this low rate, saying, we will build this company that will grow value. And because of the company's growing value, token number will go up. And then you just never do the second part with the value creation. And also very rarely is there ever a connection between a company and the token. These things don't really exist in concert. And indeed, combining them is borderline impossible.
B
Because for a while I was like, why do people keep falling for this? But it seems like it's more that people keep falling for the idea that they could potentially get in on the ground floor of a grift like this.
A
Yes. And I also think that there is a lot of people out there who truly believe that this is like investing in the stock market.
B
Yeah.
A
And they're desperate. I don't think that people realize how desperate the average person is in America. In other countries too. You get a lot of people in the Global south with this who are desperate to get in on this so that they can turn their local currency into a US dollar or a tokenized version like Tether is heavily connected to money laundering, which is great. Or other good things about this. I think it's really easy and fair, especially in the case of like Hawk Tour to judge everyone who invests this. Kind of a knowing participant in a grift. When I think more realistically, you could say half of them were. And half of them were just like God damn it, I just want a fucking chance to do so. I just want to. I can't. It's not like you can invest in the stock market and really make money. You can, but day trading is a hell art populated by goblins and it's very difficult to do. I believe it's all desperation. I believe it's because most people cannot accumulate wealth. And so they see these things that grow in these arbitrary ways. And perhaps they know deep down this is broken somehow. This is kind of a scam. Maybe. But you know what? Maybe I can get up, I can get on the board through this. I can pull the right levers and then some money will come out. Because tons of people have made money on things like this. Though not specifically this. I will say the Hawk doer thing is such an egregious rug pull. Even ape chain took a day or two. Usually this is the kind of rug pull you see someone do couple of hours on a meme coin where everyone knows it's a scam. It'll be like it used to. A few years ago you'd watch people like launch Elon rocket coin and go up and it go down and no one would be really angry because everyone was basically playing catch the knife. In this case it was marketed in such a way that I'm pretty sure she violated SEC rules. If they even slightly suggest, which they absolutely did, that this was a. A thing that you buy into to make money, they have violated securities law. And honestly, I really hope they get done for it. Not just for the justice, but because it will be very funny. It'd be very, very funny. But they'll settle. You just have this carved out piece of the Internet where people just get scammed all the time. This ain't the little itty bitty teeny tiny bowl. This is Super Bowl 59. Get in on the action at DraftKings Sports, an official sports betting partner of Super Bowl 59. Scoring touchdowns is key to hoisting the trophy, and you have a shot to score big by betting on them at DraftKings Sportsbook, the number one place to bet touchdowns. New DraftKings customers can bet $5 to get $200 in bonus bets instantly. Download the DraftKings Sportsbook app and use code BOBBY SPORTS. That's code BOBBY SPORTS for new customers to get $200 in Bonus Bets instantly. When you bet just five bucks only on DraftKings Sportsbook, the crown is yours.
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It seems like there is very little legal repercussion. Why is that?
A
Because it's quite tough to find the people. Because it costs a lot of money to litigate these things and because the law is fairly new. The actual Matt Levine of Bloomberg said a while ago that basically all crypto exchanges are illegal. They're all illegal. But it's such vague law and the SEC is taking so long to kind of work out what it is they do. It's kind of hard to say what's illegal or not. They still are dinging people and they're dinging them in this very arbitrary way that's kind of fueling these crypto people. And it pisses me off because I wish that they just have said something. And now we're going into the Trump administration, so they'll probably just put a goose in a hat as the head of the sec. And it's also very tough to legislate. And there's so much money from overseas intermingled with it as well. So many of these rug pulls come out of the global South. And again, it's a condition of desperation, a symptom of desperation even. It's just the sign that you talk about on this show. These like magical moments and then the arbitrary and sometimes quite aggressive and harmful effects of the attention you get of being online. Imagine a million little versions of that all the time with these little celebrities that get people's hopes up and steal money from them and then spend their lives trying to hide. And now there's other little micro wars that happen where people dox them and find them. I wouldn't be surprised if someone was killed. But also it gets to the core of your show as well, where it's like these people become micro celebrities. Yeah. A time when people feel lonely and isolated and insular. You can become famous and people can rely on you. And if you actually make these people money, they will love you forever.
B
Yeah.
A
Like a petty king among them.
B
I am curious about this lane of scam I guess the influencer to crypto scammer.
A
Right.
B
When did that become common practice? Because at this point I'm like, I don't keep an eye on crypto at all. And I recognize this as common practice.
A
So you had like Floyd Mayweather and a few other celebrities do it. That's what's kind of weird. Usually influences, like actual influences that regular people know stayed out of this because they realized, oh, this is quasi criminal. You had a few celebrities do it. I can't think of another podcaster who has done it like this because again, you want to avoid this because suddenly your whole podcast becomes less trustworthy. I was really surprised when I saw this was happening because it's like, why, what year is this? This isn't 2021 or 2020, when this happened all the time and no one was watching because everyone was dying. No, it's like 2024 when you're really. Well, she's probably already making a good amount of money on other stuff. I also can't. The weirdest thing is usually these things have some sort of made up company attached. Like a. Oh, this token will let you on Bling Blong, you'll be able to hire a plumber on Bling Blong. And this will be cheaper than dollars on Bling Blanc. But in this case it's just by hawk token. It's usually an NFT of a song or a thing. There's usually a thing. That's what's so weird here. Just being like, oh, I'm gonna do a crypto currency. That is some 2017 shit.
B
I think that the real red flag for me was all of a sudden the proximity to the Paul brothers, who like are addicted to, who have already.
A
Done their crypto zoo and all that. But actually that's a good point. So crypto zoo, and I don't know it super well even which one of those brothers did it? Forgive me. Whichever one of the Paul's two brothers, one name, they had like an animal, like a kind of a Pokemon situation. Like you buy into this thing. That's how these things traditionally work. You promise a bunch of stuff that you never do. That is the key part because when people say, where's my money, honey? You say, well, I'm putting it into the crypto zoo.
B
Buys you time.
A
Yeah, the grim Balls, the grackles that you find in the crypto zoo, that's where it's going. I must feed them. Or the developers that I have in a non specific place, they are working on the grimaces that will grow in your crypto zoo. And then you can kind of lead them on and hope that they forget. The thing that people don't realize is the Internet never forgets. These psychos will follow you steal someone's money online. There are people who will follow you forever. Eventually you piss off someone smart, someone animated and someone bored. And then they learn an entire kind of forensic accounting. And then they follow you through the blockchain. Just to explain very basic blockchain thing. You have a crypto wallet where your money goes. These companies, when you invest in a rug pull, you send money to something called a smart contract that has rules coded into it that says, okay, this will give the person who sends me this much money this many things out of it. So very simple, one would be $0.01 is one hawk, I'm guessing here. So $5 will get you 500 hawk, or if it's an NFT, okay, you've given me one Ethereum, I will give you 10 NFTs. Now, these contracts are then spitting the money out to other wallets. Now, teams will always say, oh, and indeed they did in the hawk 2 thing. Well, the original team can't touch that. They can't touch that money. They obviously can touch the money. They just, you can just do it. They claim that code is law, you can change code, that this is a quicker and easier theory, theoretically, way to make money. Money comes out of it way quicker and disappears even faster. And people have made tons of money on crypto. When was the last time anyone really like, there was like, stories about guy makes money honestly trading stock, guy makes money honestly doing job. No, none of the stories in the media about people who have money are about them. Like, oh, yeah, and I worked really hard and then I got what I. Boring. Yeah, no, not even. I would love to hear that if it was true, but it really is. So you hear these stories about these very irksome looking dickheads who have made millions off of crypto, and you're like, shit, I look more normal than this guy. Surely I could. Except just like every scam in America, those people already made their money and they made it in a dishonest fashion, right?
B
And they would never be transparent about how.
A
And they would also never make their money like this. They would never buy into someone else's scam. They make their own and they'd make a better one.
B
Do you think that there will be any meaningful consequence for this case?
A
I actually do.
B
Interesting. Okay, tell me more.
A
It's a piss poor rug, Paul. First of all, this is shit scam. It's just a dog shit scam. In the event she ever mentioned this on the podcast, she is getting dinged by the SEC for sure. If she said anything about hawk to a coin on a podcast, she has now said, hey, hey, look sec, I'm doing an illicit security. This is an unregistered security. Check it out. That alone will get her in trouble. I don't know how harsh the penalties will be. It really comes down to how much money she made.
B
One of the numbers I've seen is 3.3 million.
A
Oh, she may actually, she is. She's getting class action suited. The reason, by the way, that everyone so onerously tries to make sure that they don't say this is a cryptocurrency, it's a token that will be used in the system is by saying it's a cryptocurrency that's used like a currency, you enter into the Howey test, which as I mentioned previously, is the test the SEC uses to say, is this a security? If you are selling unregistered securities, that's bad, that's illegal. And on top of it, if you are marketing them, which is different, then you are extra fucked because they. The SEC really doesn't like that. And also the SEC very rarely gets open and shut cases. This is one of them. And just like every right wing grifter, she's going to assume that the right wing will protect her. Oh, they won't. She was useful for now talking about spitting on that thing, so to speak, to financial crimes. That's beautiful. It was why this show exists. But also this isn't a complex one. She's so stupid. The fact it was just a coin is so dumb. She should have been like, this will let you into the Hawk tour verse. This will let you buy your own Hawk Tours. And it could have been a series of hawks. That feels like a very 2021 idea. But this is 2024 when all the magic and whimsy has been sucked out of the financial crimes. Most of these people will never see their money again. And if they do, it will take years and years and there's not going to be the kind of media pressure that got FTX back. And also FTX was a very strange situation. So like many rug pulls, all of the victims will lose here.
B
Well, I feel amazing.
A
I feel great. Like this has cheered me up.
B
Thank you so much to Ed Zitron. You can follow him everywhere at Zitron and listen to his podcast right here, right now on Cool Zone Media. Better offline link in the description and thank you 16th minute listener. I hope you've enjoyed this series and that all things considered you're doing all right. Extra huge love to my trans listeners. I love you so much and we will be back next week. 16th Minute is a production of Cool Zone Media and iHeartRadio. It is written, hosted and produced by me, Jamie Loftis. Our executive producers are Sophie Lichterman and Robert Evans. The the Amazing Ian Johnson is our supervising producer and our editor. Our theme song is by Sad13. Voice acting is from Grant Crater and Pet shout outs to our dog producer Anderson. My cats Flea and Casper and my pet rock bird who will outlive us all. Bye. High Five Casino is a social casino with real prizes and big Vegas hits@high5casino.com.
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Sixteenth Minute (of Fame) - Episode: "hawk tuah bonus feat. ed zitron" Summary
Release Date: February 6, 2025
Host: Jamie Loftus
Guest: Ed Zitron, Host of Better Offline
In the sixteenth episode of Sixteenth Minute (of Fame), host Jamie Loftus delves into the complex world of internet fame and its darker counterparts. Building upon the recent series on Haley Welch, known online as Hawk Tuah, Jamie introduces a special bonus segment featuring Ed Zitron, the esteemed host of the tech podcast Better Offline and creator of the "Where's Your Ed At?" newsletter. This episode focuses on understanding the Hawkcoin crypto scam, unraveling the mechanics of modern digital grifts, and examining their broader societal implications.
[02:00] Jamie Loftus
Jamie opens the discussion by expressing her need for expert insights to comprehend the intricacies of the Hawkcoin scam, a prominent example of a crypto rug pull.
[04:04] Ed Zitron
Ed begins by defining a rug pull, sharing an anecdote:
"One time, a friend of mine was working on a paper for law school about rug pulls and said to me, Ed, have you seen a rug pull recently? I said, I'm watching one right now."
He identifies Hawkcoin on the Polygon blockchain as the current victim, noting, "It was called Apecoin, and it was on the Polygon blockchain Molly and I were talking about."
[04:35] Ed Zitron
Ed explains the term market cap in the context of cryptocurrencies:
"The market cap, and the term market cap, as I'm sure Molly's been over, is kind of a misnomer. It just means the value of the coin times the amount of tokens that are available."
He details how Hawkcoin's value once soared to half a billion dollars before plummeting post-rug pull, highlighting the public persona of Hawk Tuah as both a complicating factor and a hallmark of the scam's notoriety.
[06:20] Ed Zitron
Ed reflects on the societal desperation fueling such scams:
"Everyone's so desperate to try and find any way in, because just working a regular job is not sufficient enough to like rent a house, let alone buy one in many metros."
He connects this desperation to the proliferation of scams like Hawkcoin, emphasizing the cyclic nature of grifting in a "sick society."
[10:18] Ed Zitron
Ed discusses the root causes driving individuals to participate in or fall victim to crypto scams:
"I believe it's all desperation. I believe it's because most people cannot accumulate wealth. And so they see these things that grow in these arbitrary ways."
He laments the lack of genuine wealth-building narratives in media, contrasting the rare stories of honest success with the ubiquitous tales of crypto millionaires.
[16:16] Ed Zitron
Addressing legal challenges, Ed states:
"Because it's quite tough to find the people. Because it costs a lot of money to litigate these things and because the law is fairly new."
He elaborates on the difficulty the SEC faces in regulating crypto exchanges, citing Matt Levine from Bloomberg:
"Basically all crypto exchanges are illegal. They're all illegal."
Ed expresses frustration over the vague regulatory landscape, which allows scams like Hawkcoin to persist with minimal repercussions.
[22:32] Ed Zitron
When queried about potential consequences for the Hawkcoin scam, Ed is cautiously optimistic:
"I actually do. It's a piss poor rug, Paul. First of all, this is shit scam. It's just a dog shit scam."
He anticipates legal action:
"In the event she ever mentioned this on the podcast, she is getting dinged by the SEC for sure."
Ed underscores the severity of Hawkcoin's infractions, suggesting that regulatory bodies will eventually clamp down on such blatant scams.
[23:12] Ed Zitron
Ed highlights the legal intricacies:
"If she said anything about hawk to a coin on a podcast, she has now said, hey, hey, look sec, I'm doing an illicit security. This is an unregistered security. Check it out."
He anticipates prolonged legal battles:
"Most of these people will never see their money again. And if they do, it will take years and years."
As the conversation wraps up, Ed Zitron reflects on the perpetual nature of crypto scams within the digital landscape. He emphasizes that without substantial legal reforms and societal shifts, scams like Hawkcoin will continue to exploit the vulnerable, perpetuating a cycle of deception and loss.
[24:42] Ed Zitron
In a moment of levity, Ed shares his personal sentiment:
"I feel amazing."
[24:44] Jamie Loftus
Jamie expresses her gratitude:
"Thank you so much to Ed Zitron."
She concludes by extending love to her listeners and hinting at the show's return the following week.
This episode of Sixteenth Minute (of Fame) serves as a poignant exploration of the intersection between digital fame, societal desperation, and the mechanics of modern scams. Through the expert insights of Ed Zitron, listeners gain a comprehensive understanding of how scams like Hawkcoin not only exploit individual vulnerabilities but also reflect broader systemic issues within our society and regulatory frameworks.
Notable Quotes:
Ed Zitron at [04:35]:
"The goal is to get a bunch of money, and then the owners start selling off the tokens."
Ed Zitron at [06:20]:
"Everyone's so desperate to try and find any way in, because just working a regular job is not sufficient enough to like rent a house."
Ed Zitron at [10:18]:
"I believe it's all desperation. I believe it's because most people cannot accumulate wealth."
Ed Zitron at [16:16]:
"Basically all crypto exchanges are illegal. They're all illegal."
Ed Zitron at [22:32]:
"In the event she ever mentioned this on the podcast, she is getting dinged by the SEC for sure."
Sixteenth Minute (of Fame) is a production of Cool Zone Media and iHeartPodcasts. For more insights into the digital world's infamous characters, subscribe and stay tuned for upcoming episodes.