Investors are taking the creators of the Hawk Tuah token to court after the memecoin, the $HAWK token, lost more than 95% of its value just hours after its launch. The memecoin launched on December 4, 2024, with an initial market cap of $490 million, only to drop to $60 million in a day, causing huge financial losses to early investors.
The lawsuit was filed by Burwick Law with a federal court on December 19, 2024. It allegedly says that the defendants wrongly touted and sold the unregistered cryptocurrency. The same lawsuit includes several people and groups connected with the project under question: Tuah The Moon Foundation, OverHere Ltd., key people Clinton So and Alex Larson Schultz.
The Plaintiffs allege that defendants engaged in heavy advertisement practices, riding the popularity of Hailey Welch on social media to cause a surge of demand that led to a rapid increase in value of the coin, followed by a rapid and precipitous decline that wiped out the investments of many.
The court documents say the defendants promoted the $HAWK token using social media, and Welch ran a podcast named “Talk Tuah,” where he got famous guests, one such guest being Mark Cuban.
According to lawyers representing the investors, all such promotions confused new crypto users who were attracted to the project because of Welch’s fame. So many of those investors who believed in the promises on future growth suffered major losses once the value suddenly dropped.
Welch earned the nickname “Hawk Tuah Girl” after a viral interview in which she said “hawk tuah.” She took that fame and created her merchandise line and did podcasts with it, but her association with the $HAWK token project has ruffled some people’s feathers.
But even with the crash, Welch continued to support the project. In an interview with Fortune on December 4, 2024; she said the memecoin was “not just a cash grab.” She emphasized that it was a way for her to connect with her fans.
The lawsuit says Welch and her team didn’t sell any tokens of their own and didn’t tell others to buy them. But some investors and critics have accused Welch’s team of doing a “pump and dump” scheme—this is when someone makes the value of a coin go up before selling it for profit, leaving investors with useless tokens.
Also Read: Hawk Tuah Girl: The Internet Enchantress Who Just Scammed You
