Investors have sued a number of people and entities related to a cryptocurrency created by Hawk Tuah Girl Hailey Welch, amid a dramatic collapse of over 95% within the HAWK memecoin worth on December 4, the identical day it launched.
Lawyers for the buyers, in a submitting dated December 19, claimed the case arose from the “unlawful promotion and sale” of the HAWK token. The submitting additional talked about that the defendants offered and supplied the token to the general public with out registration in accordance with the legal guidelines and therefore, violated such.
HAWK Memecoin Crashes 93%, Investors Sue Creators for Fraud
The Burwick Law agency has filed a US federal lawsuit on behalf of buyers in opposition to the creators of the HAWK memecoin after its catastrophic failure shortly after its launch.
Hailey Welch, who rose to web fame earlier this 12 months because the “Hawk Tuah” girl after a viral interview about sexual methods, was the general public face of the Solana-based meme coin when it launched in the beginning of December.
Burwick Law filed a federal lawsuit on behalf of buyers within the HAWK TUAH memecoin, $HAWK.
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— Burwick Law (@BurwickLaw) December 19, 2024
Things rapidly went downhill shortly after the HAWK memecoin launch. The value tumbled 93% from a peak market capitalization of $490 million, with many alleging a rug pull. And to make issues worse, a gaggle of linked wallets holding 96% of the token provide was additionally uncovered. The plot thickened when it emerged that among the wallets had began promoting tokens, inflaming the outrage.
The lawsuit lists a number of defendants, together with Tuah The Moon Foundation, which allegedly managed the token sale proceeds, and the creator of the coin, OverHere Ltd, and its government, Clinton So. Alex Larson Schultz, a Los Angeles-based promoter of the memecoin, can be named as a defendant.
Did ‘Hawk Tuah’ Girl Hailey Welch Scam Her Fans?
Hailey Welch first gained web fame when a YouTube video went viral. In the video she used the phrase “hawk tuah” to explain a spitting motion in a sexual context. Since then, she has constructed a model on her web stardom, beginning a merchandise line and a podcast, *Talk Tuah*. High-profile visitors on the podcast have included entrepreneur Mark Cuban.
The lawsuit claims that Welch and her associates utilized her movie star and enterprise platform to extensively promote the HAWK memecoin. Lawyers for the plaintiffs say the defendants ran aggressive advertising and marketing campaigns and promised vital future progress.
These efforts allegedly created a speculative frenzy that brought about the token to skyrocket in worth shortly after its launch, reaching a notable market capitalization. It additionally accuses Welch of discussing the HAWK venture in her podcasts and utilizing her movie star standing and networks to reinforce the token.
A memecoin is a cryptocurrency that’s primarily based on some fashionable web meme or joke, and sometimes has very restricted sensible utility. However, there are many memecoins presales of which, can change into profitable. One such coin, HAWK, turned related to Hailey Welch, a.ok.a. “Hawk Tuah Girl,” who just isn’t a defendant within the lawsuit, filed in federal courtroom within the Eastern District of New York.
The attorneys for the plaintiffs cite that Welch’s extremely vital social media following was there solely to advertise HAWK memecoin as a breakthrough crypto venture. Many new cryptocurrency buyers thought the token was enticing and that it’s going to succeed resulting from Welch’s backing and the clear highway map of the venture. However, the dramatic collapse within the token erased $440 million in worth inside 20 minutes and introduced large losses for these buyers.
Hailey Welch Denies Cash Grab
The plaintiffs claimed that Welch’s involvement and promotion was essential for attracting buyers. The go well with claims that Welch’s advertising and marketing campaigns used her movie star: “Welch used social media and made public appearances to shill for FTX.”.
On December 4, Welch defended her venture, telling *Fortune* that HAWK was “not just a cash grab.” She mentioned her curiosity in crypto had developed after attending conferences, realizing its potential as a method to interact together with her fan base. Her supervisor, Jonnie Forster, emphasised that the HAWK memecoin was supposed to face aside from typical celebrity-endorsed crypto initiatives.
According to Forster, Welch and her workforce didn’t encourage followers to purchase the token. Instead, they needed to present free tokens to followers who purchased Welch’s merchandise or engaged together with her on-line content material. Forster additionally mentioned Welch holds 10% of the HAWK memecoin provide however is contractually unable to promote her share for a 12 months. Despite these assurances, the token’s collapse has buyers questioning if the venture was a money seize.
The defendants will be given the chance to reply the grievance and are probably to file a movement for abstract judgment of their favor. If the decide does not grant abstract judgment, the case will proceed with pretrial motions. The plaintiffs have requested a jury trial, which, if granted, would imply that a jury would decide damages if the lawsuit is profitable.
Teuta Franjkovic
Teuta is a seasoned author and editor with over 15 years of experience in macroeconomics, know-how, and the crypto and blockchain sectors.
She started her profession in 2005 as a life-style author for *Cosmopolitan* earlier than transitioning to enterprise and financial reporting for famend shops like *Forbes* and *Bloomberg*.
Inspired by thought leaders like Don and Alex Tapscott and Laura Shin, Teuta embraced blockchain’s potential, viewing cryptocurrency as one among humanity’s most transformative improvements.
Since 2014, she has specialised in fintech, specializing in crypto, blockchain, NFTs, and Web3. Known for her robust collaboration and communication expertise, Teuta additionally holds twin MAs in Political Science and Law.
Disclaimer: The offered content material could embrace the private opinion of the writer and is topic to market situation. Do your market analysis earlier than investing in cryptocurrencies. The writer or the publication doesn’t maintain any duty on your private monetary loss.
