In this lesson
- understand how a pump and dump works and who earns on it
- see what happened to the celebrity memecoins $LIBRA and $HAWK
- learn the signs that you are the exit liquidity
What is a crypto pump and dump? A small group buys a cheap token early, hypes it through Telegram groups, influencers or a famous name, and sells into the wave of buyers it created – the price then collapses and the late buyers are left holding the losses. Celebrity memecoins showed how fast it can go: $HAWK lost over 90 % of its value within hours of its launch in December 2024, and $LIBRA, promoted by Argentina's President Javier Milei on 14 February 2025, crashed within hours; on-chain analysts estimated losses of about 251 million dollars for its buyers.
A memecoin promises you'll get rich. And to be fair, someone always does. It just usually was not you – they were there about four seconds earlier.
How does a pump and dump work?#
A pump and dump needs three ingredients: a token with little liquidity, a crowd and a story.
- Accumulation. The organisers – the creators, their friends, sometimes paid "early investors" – own most of the supply, or buy it for almost nothing before anyone else knows.
- Snipers. Bots buy in the very first seconds after launch, often within the same block. Some of them belong to insiders.
- The pump. A Telegram group counts down "3… 2… 1… BUY!", influencers post "100× gem", a celebrity shares the link. Charts go vertical and FOMO does the rest.
- The dump. The organisers sell into the buyers' orders. With low liquidity, the price falls 80–95 % in minutes.
- The excuses. "Market conditions", "hackers", "we were not involved in the launch". The tokens stay with the people who bought last.
It is a cousin of the rug pull: in a rug pull the creators run off with the pool; in a pump and dump they simply sell to you at the top.
What happened to $LIBRA?#
On the evening of 14 February 2025 Argentina's President Javier Milei posted on X a link to a new memecoin, $LIBRA, presented as a project to fund small Argentine businesses. Within about an hour its market value shot to several billion dollars; then large wallets started selling and the price fell by more than 80 % within hours.
- According to the analytics firm Nansen, about 86 % of $LIBRA traders lost money – roughly 251 million dollars together – while wallets linked to the launch took out large profits.
- Milei deleted the post within hours and said he had not been aware of the project's details and had no link to it.
- The token was launched with the involvement of Hayden Davis and his company Kelsier Ventures; Davis denied running a scam.
- In Argentina, a federal court opened a criminal investigation and Congress set up an investigative commission; its report in November 2025 concluded that Milei had used his office to promote the token. Investors also filed class actions in New York.
As of October 2026 the investigations and lawsuits are ongoing and no one has been convicted over $LIBRA.
What happened to $HAWK?#
Haliey Welch became famous in 2024 as the "Hawk Tuah girl" from a viral street interview. On 4 December 2024 she launched the memecoin $HAWK on Solana. Its market value briefly approached half a billion dollars – and then fell by more than 90 % within hours. Critics, including the YouTuber Coffeezilla, alleged that insiders and snipers had bought a large part of the supply at the start; the team denied it. Buyers filed a lawsuit in New York against the people and companies behind the launch. Welch said she had only been paid for promotion; in March 2025 her lawyers said the US SEC had closed its inquiry without action against her.
How do most memecoins end?#
Memecoins are cheap to create: on the launchpad pump.fun (launched in January 2024) it takes a picture, a name and about two dollars. According to Solidus Labs (May 2025), out of more than 7 million tokens created there, about 98.6 % showed the pattern of a pump and dump or a rug pull, and only about 97,000 still had more than 1,000 dollars of liquidity. A famous name does not change the maths – it only makes the pump louder.
Timeline#
| Date | What happened |
|---|---|
| January 2024 | pump.fun launches; creating a memecoin now takes a minute |
| 4 December 2024 | $HAWK launches and loses over 90 % of its value within hours |
| 14 February 2025 | Milei shares $LIBRA; the price soars and crashes the same evening |
| March 2025 | Welch's lawyers say the SEC closed its $HAWK inquiry without action |
| May 2025 | Solidus Labs: about 98.6 % of pump.fun tokens show pump-and-dump or rug-pull traits |
| November 2025 | Argentine congressional commission publishes its report on $LIBRA |
Warning signs you could have seen#
- A countdown or "launch in 10 minutes". You are being lined up as buyer number 5,000.
- A celebrity with no connection to crypto who suddenly has "their own" token.
- Concentrated supply: a few wallets hold most of the tokens – a block explorer shows it in a minute.
- Paid hype: many accounts posting the same rocket emoji and "100×" at the same time.
- No product, only a story – "for small businesses", "for the community", "for the culture".
- You found out from the people who already own it. Their profit needs your purchase.
In a pump, you are the exit
Whoever bought before the hype needs someone to sell to – and that someone is you. If you buy a token because it is already shooting up, assume you are buying from insiders and can lose everything within minutes.
Common myths#
- "A president or a celebrity would not promote a scam." Famous people get paid for posts, and some later say they did not know the details. Either way, the famous name does not protect your money.
- "I will sell before the dump." Bots and insiders are faster than your thumb.
- "If it is on a big launchpad, it is checked." Launchpads check nothing about the people behind a token.
Summary
- A pump and dump = insiders buy cheap, hype the token, sell to the crowd.
- $HAWK (December 2024) and $LIBRA (February 2025) crashed within hours of their launch.
- $LIBRA is still under investigation in Argentina and in US courts; nobody has been convicted (October 2026).
- Almost all new memecoins end near zero; a famous name only makes the pump louder.
Want to see what a pump and dump looks like on a chart? It is in the lesson The most common scams.