- HAWK memecoin lost 95% of its value within hours, wiping out $440 million in market capitalization.
- 96% of the token supply was controlled by linked wallets, triggering accusations of fraudulent activity.
- Investors filed a federal lawsuit, citing Hailey Welch and others’ unregistered sales and aggressive promotion.
Investors in the HAWK memecoin have filed a federal lawsuit after the token’s value fell by over 95% on its launch day, December 4. The lawsuit, filed on December 19, accuses several individuals involved in the creation and promotion of the token fraud and unregistered sales.
HAWK Memecoin Collapse and Lawsuit
The HAWK memecoin, associated with internet personality Hailey Welch, launched with a peak market capitalization of $490 million. Within hours, the token’s value crashed by 95%, as noted by Watcher Guru on the X platform.
Further investigations revealed that 96% of the token supply was held by a small group of linked wallets, some of which had started selling tokens immediately after the launch. The collapse of the Solana-based memecoin erased approximately $440 million in value, leaving investors facing significant losses.
Burwick Law filed the lawsuit in a U.S. federal court on behalf of affected investors. Defendants include Tuah The Moon Foundation, OverHere Ltd, its executive Clinton So, and Alex Larson Schultz, a promoter of the token.
While not listed as a defendant, Welch is accused of using her public platform to aggressively promote the token. Lawyers claim that the defendants violated securities laws by selling unregistered tokens to the public.
Allegations Against Welch and Defense
Welch, who gained fame as the “Hawk Tuah Girl” earlier this year, allegedly leveraged her celebrity status to attract investors. According to the lawsuit, Welch promoted the token extensively through her podcast, social media, and public appearances. Her marketing campaigns reportedly created a speculative frenzy, driving the token’s initial surge in value.
Welch and her team denied allegations of wrongdoing, stating that the project was not intended as a cash grab. Welch’s manager, Jonnie Forster, emphasized that free tokens were offered to fans engaging with Welch’s content or purchasing merchandise.
Welch reportedly holds 10% of the token supply, which she claims she cannot sell for one year due to contractual restrictions. The case remains ongoing, with the plaintiffs requesting a jury trial to determine damages if their claims succeed.
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