On December 4, the launch of the HAWK memecoin was overshadowed by a staggering drop in value, plummeting more than 95% within hours. This catastrophic decline prompted both individual and institutional stakeholders to initiate legal action against the project’s creator, Hailey Welch, alleging that they suffered significant financial damages due to unauthorized promotion and the sale of the HAWK token.
What Led to HAWK’s Dramatic Value Drop?
The Burwick Law firm is representing the affected investors in a lawsuit filed in a U.S. federal court. The claim asserts that the plaintiffs incurred losses due to the unlawful marketing of the HAWK token, which was allegedly provided to the public without appropriate regulatory registration.
The immediate aftermath of the launch revealed a concerning trend: wallets holding 96% of the token supply liquidated their holdings, raising alarms among investors and fueling suspicions of fraudulent intent behind the token’s rapid decline.
How Does Hailey Welch Respond to the Allegations?
In response to the backlash, Welch asserted that HAWK is not simply a fundraising initiative. During an interview with Fortune magazine on the same day of the launch, she expressed her genuine interest in cryptocurrency, sparked by attending various conferences, and emphasized her commitment to engaging with her community. Welch’s manager, Jonnie Forster, also noted the distinct nature of HAWK compared to other projects endorsed by celebrities.
The lawsuit implicates multiple defendants, including Tuah The Moon Foundation, OverHere Ltd, and manager Clinton So, alongside Los Angeles-based marketer Alex Larson Schultz, highlighting the broad scope of accountability being sought by the plaintiffs.
- This incident underscores the importance of regulatory compliance in cryptocurrency transactions.
- The swift rise and fall of the HAWK token has significantly shaken investor trust.
- Legal proceedings will determine the accountability of all parties involved.
As the legal proceedings unfold, uncertainty looms over the future of the HAWK project and its stakeholders. A judge will soon decide whether to send the case to jury trial while assessing motions for summary judgment.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
