TLDR
Hailey Welch’s Hawk Tuah (HAWK) memecoin crashed 95% after launch, wiping out millions in investor funds, leading to her disappearance from public view
Investors filed a lawsuit against Tuah The Moon Foundation, OverHere Ltd, Clinton So, and Alex Larson Schultz for alleged securities law violations
The pre-sale raised $2.8 million with token valued at $16.69 million, before skyrocketing to $491 million market cap and crashing below $100 million
On-chain analysis revealed 96% of token supply was concentrated in a few related wallets at launch
Despite attempts to structure as an offshore entity, the project allegedly targeted US investors, potentially violating securities laws
The cryptocurrency community faces another controversy as the Hawk Tuah memecoin, promoted by internet personality Hailey Welch, crashed 95% in value, leading to legal action and the creator’s disappearance from public view.
Welch, known for her “Talk Tuah” podcast and “Hawk Tuah Girl” persona, last communicated with her audience through a simple message about “going to sleep.” This message preceded a massive price collapse that erased hundreds of millions in market value.
The token’s journey began with a pre-sale that raised $2.8 million, valuing the project at $16.69 million. On December 4, 2024, HAWK launched with explosive momentum, reaching a market capitalization of $491 million within hours. However, the celebration was short-lived as the value plummeted below $100 million shortly after.
Investors have now filed a lawsuit in the US District Court for the Eastern District of New York. The legal action targets multiple entities: Tuah The Moon Foundation, OverHere Ltd, its founder Clinton So, and influencer Alex Larson Schultz. While Welch is not named as a defendant, her role in promoting the token through social media and her podcast features prominently in the complaint.
The lawsuit alleges losses exceeding $151,000 and claims the token constituted an unregistered security. According to court documents, the defendants attempted to avoid US securities laws by structuring the Tuah The Moon Foundation as an offshore entity. However, the complaint argues they made little effort to restrict token sales to US investors.
On-chain investigation platform Bubblemaps revealed concerning details about the token’s distribution. At launch, 96% of HAWK’s supply was concentrated in a small group of related wallets, raising questions about the project’s decentralization claims.
$HAWK didn’t disappoint
96% of the supply in one cluster
nice https://t.co/AP645QzkfI pic.twitter.com/ERHTG7v5oa
— Bubblemaps (@bubblemaps) December 4, 2024
The token’s economics, dubbed “Hawkanomics,” showed that only 2% of the total supply was allocated for public distribution. A larger portion, 17%, was designated as a “strategic allocation” that became fully unlocked at launch. These tokens allegedly moved to insider wallets.
Cryptocurrency investigator Coffeezilla raised additional concerns during an X Space discussion. He questioned the team about over $1 million in fees generated from the token and suggested the rapid price decline stemmed from insider trading rather than market dynamics alone.
This incident adds to a pattern of celebrity-linked memecoin failures in 2024. Similar tokens associated with Andrew Tate, Jason Derulo, and Caitlyn Jenner resulted in substantial losses for holders, each showing similar patterns of concentrated token ownership.
The lawsuit emphasizes how the project leveraged Welch’s internet fame to market HAWK as an investment opportunity. Many affected investors were fans of Welch’s content who were new to cryptocurrency trading.
In response to mounting criticism, Welch has withdrawn from public view, stopping her social media activities and podcast production. The timing of her departure, coinciding with the token’s collapse, has intensified scrutiny of the project.
Court documents indicate the defendants promoted HAWK through pre-sale campaigns and discounted token offerings. The marketing efforts portrayed token ownership as equivalent to holding shares in the project.
The price collapse occurred within minutes of the token’s launch, with an 88% drop as major holders quickly sold their positions. This rapid decline triggered immediate concerns about potential market manipulation.
The lawsuit highlights how the project specifically targeted the American market despite claims of being an offshore entity. This detail could prove crucial as US securities laws typically apply when American investors are involved.
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