Investors have filed a lawsuit against the creators and promoters of the Hawk Tuah (HAWK) memecoin, alleging that its launch involved the illegal sale of unregistered securities.
The lawsuit, filed on 19 December 2024, targets several key figures and entities, including the Tuah The Moon Foundation, OverHere Ltd, Clinton So, and Alex Larson Schultz, who are accused of promoting the token to potential investors.
The legal complaint claims that the pre-launch marketing for HAWK framed it as more than just another speculative crypto asset.
EXPLORE: 20 New Crypto Coins to Invest in 2024
HAWK Memecoin Was Portrayed As A Cultural Movement
Plaintiffs claim it was portrayed as a cultural movement with strong growth potential, leveraging the influence of social media personality Haliey Welch.
The filing alleges that Welch’s reputation as a public figure gave the project an air of legitimacy, encouraging her followers to invest.
The HAWK memecoin experienced a meteoric rise after its December 4 launch. Initially valued at $16.6 million, the token’s market capitalization skyrocketed to $491 million within hours.
However, the euphoria was short-lived as the coin’s value plummeted over 90%, leaving it at just $41.7 million. This sharp decline triggered accusations of a “pump-and-dump” scheme, with angry investors taking to social media to voice their frustration.
Some investors have since filed complaints with the U.S. Securities and Exchange Commission (SEC), urging other affected parties to do the same.
Haliey Welch, a central figure in the controversy, denied any allegations of insider trading, asserting that neither she nor her team engaged in unlawful activity.
Blockchain data firm Bubble Maps shows that upwards of an estimated 80% of all wallets and snipers were controlled by insiders, skewing the token’s value.
“We tried to stop snipers as best we could through high fee’s in the start of launch on @MeteoraAG,” Welch said in a Thursday X post. “Fee’s have now been dropped.”
Copy and pasting:
Hawkanomics:
Team hasn’t sold one token and not 1 KOL was given 1 free token
We tried to stop snipers as best we could through high fee’s in the start of launch on @MeteoraAG
Fee’s have now been dropped pic.twitter.com/E7xN9VmCrx
— Haliey Welch (@HalieyWelchX) December 4, 2024
EXPLORE: 15 Best Anonymous Bitcoin Wallets with no KYC in 2024
Coffeezilla Defends Welch Team
Prominent YouTuber “Coffeezilla“ also weighed in, dismissing the rug pull allegations. He argued that early token sales to “strategic advisers” were part of the business model, not an exit scam. He also rejected claims that Welch made $50 million from the token launch.
According to Coffeezilla, the HAWK team “presold a few million” tokens to strategic advisors who allegedly sold early, contributing to the token’s volatility.
He clarified that the “exact amount” of funds generated is still unknown but noted Welch’s lawyer stated she received $125,000, with her tokens locked for a year. Coffeezilla also highlighted that it remains unclear where proceeds from transaction fees and the presale have gone.
Lots to criticize here and I do, but let’s stay to what we know.
Team made a few million. (Exact amount unknown)
According to Hawk’s lawyer she’s seen $125k and her tokens unlock in a year.
Where the profits from fees and presale goes is currently unknown.
— Coffeezilla (@coffeebreak_YT) December 6, 2024
EXPLORE: Best New Cryptocurrencies to Invest in 2024
Disclaimer
Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
99Bitcoins may receive advertising commissions for visits to a suggested operator through our affiliate links, at no added cost to you. All our recommendations follow a thorough review process.
Comments (No)