Investors Sue $HAWK Crypto Memecoin Promoters for Alleged Unlawful Sales and Compliance Violations

Overview

$HAWK’s 95% value drop fuels rug-pull accusations and investor outrage.

The controversy surrounding “Hawk Tuah Girl”—Hailey Welch has taken a legal turn. Investors have now filed a lawsuit against individuals and entities linked to the now-collapsed $HAWK memecoin.

The token, which plummeted over 95% in value on its launch day—December 4th, has been at the center of allegations of unlawful promotion and sales practices.

A Filing Against Hailey Welch and Partners

In a filing dated December 19th by the Burwick Law firm, investors accused the defendants of violating regulations by offering and selling the token to the public without proper registration.

The lawsuit alleged that aggressive promotional efforts initially drove up the token’s market value, only to plummet shortly after launch.

> “Through aggressive promotional campaigns and promises of future growth, Defendants created a speculative frenzy that caused the Token’s market value to spike shortly after launch, reaching a significant market capitalization.”

It further noted,
> “Defendants leveraged Welch’s celebrity status and connections to enhance the Token’s credibility and appeal, including discussing the $HAWK project during Welch’s podcasts featuring notable guests.”

The lawsuit identified multiple defendants, including Tuah The Moon Foundation, OverHere Ltd, and Clinton So, along with promoter Alex Larson Schultz.

Notably, $HAWK crypto’s rapid decline, losing 95% of its value from a peak market capitalization of $490 million, has sparked allegations of a rug pull. Investors are further outraged by the discovery of wallets holding 96% of the token supply that began offloading tokens.

Despite these concerns, Welch defended the project, asserting it was “not just a cash grab.” Her manager, Jonnie Forster, emphasized plans to distribute free tokens to fans as a means of engagement rather than encouraging direct purchases.

However, the token’s collapse has left many questioning the project’s true intentions.

What Lies Ahead?

As the legal battle unfolds, the defendants, including Welch, will have the opportunity to respond to the allegations. A motion for summary judgment may follow, potentially leading to a pretrial phase if the motion is denied.

The plaintiffs have sought a jury trial, which could result in a jury determining damages should the lawsuit succeed.

Regardless of the outcome, this case underscores the risks associated with celebrity-endorsed cryptocurrency projects and raises broader concerns about transparency and accountability in the crypto space.

Ethereum co-founder Vitalik Buterin recently criticized celebrity-endorsed memecoins, calling for more meaningful crypto projects.