Investors Sue Hailey Welch’s Team Over HAWK Memecoin Crash

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As a seasoned researcher with over two decades of experience in the financial industry, I have witnessed countless cases of market manipulation and fraudulent activities. However, the recent case of the HAWK memecoin is one that stands out for its sheer audacity and the involvement of Hailey Welch, a celebrity who rose to fame through an unexpected viral video.

Lawsuits have been filed against various people and organizations linked to a cryptocurrency developed by Hawk Tuah Girl Hailey Welch, following an unprecedented drop of more than 95% in the value of the HAWK memecoin on December 4, which was also its launch date.

On December 19th, lawyers representing the investors argued in a document that the case stemmed from the “illegal offering and sale” of the HAWK token. The filing also stated that the defendants failed to comply with necessary registrations when selling and providing the token to the public, thereby breaching legal requirements.

HAWK Memecoin Crashes 93%, Investors Sue Creators for Fraud

The Burwick Law firm has filed a US federal lawsuit on behalf of investors against the creators of the HAWK memecoin after its catastrophic failure shortly after its launch.

Hailey Welch, who gained online popularity earlier this year following the “Hawk Tuah” interview discussing intimate matters, represented the Solana-based meme coin during its launch in early December.

Burwick Law filed a federal lawsuit on behalf of investors in the HAWK TUAH memecoin, $HAWK.

Learn more below.

— Burwick Law (@BurwickLaw) December 19, 2024

After the launch of HAWK memecoin, things took a turn for the worse. The price plummeted by an astounding 93%, dropping from a record high market capitalization of $490 million. There were accusations of a ‘rug pull’, and to add fuel to the fire, it was discovered that a group of interconnected wallets controlled 96% of the token supply. The situation became even more suspicious when it was found out that some of these wallets started selling off tokens, sparking anger among investors.

The lawsuit lists several defendants, including Tuah The Moon Foundation, which allegedly controlled the token sale proceeds, and the creator of the coin, OverHere Ltd, and its executive, Clinton So. Alex Larson Schultz, a Los Angeles-based promoter of the memecoin, is also named as a defendant.

Did ‘Hawk Tuah’ Girl Hailey Welch Scam Her Fans?

Initially, Hailey Welch garnered online popularity after a YouTube video became widely shared. In this video, she employed the term “hawk tuah” to explain an action resembling spitting, but in a suggestive manner related to sex. Following her internet fame, she has capitalized on it by launching a merchandise line and podcast titled “*Talk Tuah*”. Notable figures appearing on her podcast include businessman Mark Cuban.

The lawsuit claims that Welch and her associates utilized her celebrity and business platform to widely promote the HAWK memecoin. Lawyers for the plaintiffs say the defendants ran aggressive marketing campaigns and promised significant future growth.

As an analyst, I’ve been examining the situation closely, and it appears that the initiatives taken were claimed to have sparked a wild speculative surge, causing the token’s value to soar dramatically immediately after its debut, reaching a significant market capitalization. Furthermore, these allegations suggest that Welch spoke about the HAWK project on her podcasts and leveraged her celebrity influence and connections to boost the token’s popularity.

A memecoin refers to a type of digital currency that originates from a well-known internet meme or humorous concept, and usually doesn’t have much practical value. Nevertheless, many initial sales (presales) of these coins can be profitable. One example is HAWK, which gained popularity due to Hailey Welch, also known as “Hawk Tuah Girl,” even though she isn’t involved in the lawsuit filed at the Eastern District Court of New York.

The lawyers for the plaintiffs argue that Welch used his substantial social media influence primarily to publicize HAWK memecoin as a groundbreaking cryptocurrency project. Many new crypto investors found the token appealing and believed it would be successful thanks to Welch’s endorsement and the clear outline of the project. Unfortunately, the rapid decline in the token’s value resulted in a $440 million loss within just 20 minutes, causing significant financial losses for those investors.

Hailey Welch Denies Cash Grab

In the lawsuit, it is argued that Welch’s role and public endorsement were essential in drawing investors towards FTX. Translated differently, the claim is that Welch utilized her fame by leveraging social media platforms and public events to promote FTX.

On December 4th, Welch explained to Fortune that HAWK wasn’t merely a money-making scheme. She mentioned that her curiosity towards cryptocurrency grew following conferences, where she recognized its potential for connecting with her fan base. Her manager, Jonnie Forster, underscored that the HAWK memecoin was designed to be distinct from typical celebrity-backed crypto ventures.

As stated by Forster, instead of urging fans to purchase the token, Welch and her team opted to offer free tokens as rewards for purchasing merchandise or interacting with her online content. Forster further mentioned that Welch owns 10% of the HAWK memecoin inventory, but due to contractual obligations, she is prohibited from selling it for a period of one year. However, the token’s decline has left investors questioning whether the venture was just a means to generate quick cash.

The accused parties will have the chance to respond to the accusations, and they might submit a request for a summary judgment in their support. If the judge denies this motion, the trial proceeds with preliminary motions. Should a jury trial be allowed (as requested by the plaintiffs), it would imply that a jury would decide on the damages if the lawsuit is victorious.

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2024-12-19 22:44