Former UNC Swimming Star Indicted in $22 Million Crypto Rugpull Scheme

In a case highlighting the ongoing risks in the cryptocurrency space, former University of North Carolina swimming commit Gavin Mayo, along with Gabriel Hay, has been indicted for allegedly defrauding investors of over $22 million through a cryptocurrency “rugpull” scheme.

The indictment, announced by the U.S. Justice Department, accuses the pair of orchestrating a fraudulent digital asset project designed to attract investments before abruptly abandoning the initiative and pocketing the funds. Known as a “rugpull,” this type of fraud has become increasingly prevalent in the volatile world of cryptocurrency and digital assets.

According to court documents, Mayo and Hay, both 23, allegedly lured investors into their scheme by making false promises about the legitimacy and potential returns of their cryptocurrency projects. Once investments flooded in, the two abruptly shuttered operations, leaving investors with worthless assets and substantial financial losses.

The Justice Department also revealed that the duo allegedly resorted to intimidation to silence those who questioned their practices. One project manager, who attempted to expose the fraudulent activity, was reportedly threatened by Mayo and Hay.

“Gabriel Hay and Gavin Mayo allegedly defrauded investors in digital asset projects of tens of millions of dollars and threatened an individual who attempted to expose their roles in these fraudulent schemes,” said Principal Deputy Attorney General Nicole M. Argentieri. “Fraudsters take advantage of new technologies and financial products to steal investors’ hard-earned money. The department is committed to protecting investors and will continue to work with our law enforcement partners to root out fraud involving cryptocurrency and other digital assets and bring offenders to justice.”

The Broader Issue: Hawk Tuah Token and the Rise of Crypto Scams

The case against Mayo and Hay is not an isolated incident. In 2024, a similar controversy erupted involving the Hawk Tuah token, launched by social media influencer Haliey Welch, better known as Hawk Tuah Girl. Welch leveraged her viral fame to promote the token, attracting a fervent base of supporters who believed in her promises of future value and utility.

However, the token’s value plummeted shortly after its launch, leaving her most loyal followers with significant financial losses. Many critics labeled the situation a rugpull, accusing Welch of cashing in on her celebrity status while leaving her fans in financial ruin.

These cases underscore a troubling trend in the cryptocurrency space: the proliferation of scams exploiting the lack of regulation and the allure of quick riches. Rugpulls, pump-and-dump schemes, and other fraudulent practices are becoming increasingly common as bad actors take advantage of the hype surrounding digital assets.

Protecting Investors

Regulators and law enforcement agencies are intensifying efforts to combat cryptocurrency fraud. The Justice Department’s recent actions signal a firm commitment to holding fraudsters accountable, but experts warn that investors must also exercise caution.

To avoid falling victim to scams, financial advisors recommend thorough research, skepticism toward promises of outsized returns, and avoiding investments promoted primarily by influencers or unverified sources.

For Mayo and Hay, the charges mark a stunning fall from grace. Once celebrated for his athletic prowess, Mayo now faces severe legal consequences alongside Hay. If convicted, the two could face lengthy prison sentences and significant financial penalties.

Meanwhile, the cryptocurrency community continues to grapple with the fallout from such schemes, as they undermine trust in a sector still striving for mainstream acceptance.

This case serves as a stark reminder of the risks inherent in the cryptocurrency market and the importance of vigilance in navigating its often-turbulent waters. More guardrails should be put in place by the powers that be who maintain the blockchain networks that they are created on and the exchanges that they trade on, this could very well be the blockade to limit such fraud from occurring in the first place.

Thomas Lin
UCW Newswire