The situation involving Hailey Welch, also known as “Hawk Tuah Girl,” has now transitioned into a legal battle. Investors have officially filed a lawsuit against various individuals and organizations associated with the now-collapsed $HAWK meme token.
The token saw a drastic 95% drop in value on its launch day, December 4th, sparking claims of illicit promotional and sales tactics.
Lawsuit Filings Targeting Hailey Welch and Affiliates
A filing made by the Burwick Law firm on December 19th alleges that the defendants violated regulations by distributing and vending the token to the public without the necessary registration.
The lawsuit claims that the token’s market value initially soared due to aggressive promotional activities but swiftly crashed post-launch.
The filing states,
“By employing aggressive marketing strategies and promising future growth, the Defendants created a speculative frenzy that led to a sharp increase in the Token’s market value immediately after its release, resulting in a substantial market capitalization.”
Furthermore, it mentioned,
“Defendants capitalized on Welch’s fame and connections to boost the credibility and appeal of the Token, including discussing the $HAWK project on Welch’s podcasts with prominent guests.”
The lawsuit names several defendants, including Tuah The Moon Foundation, accused of handling the token sale proceeds, the coin’s creator OverHere Ltd, and its executive Clinton So.
In addition, Alex Larson Schultz, a promoter based in Los Angeles, was highlighted as a significant defendant in the case.
The significant downfall of $HAWK crypto, losing 95% of its value after reaching a peak market capitalization of $490 million, has triggered accusations of a rug pull and intensified doubts about its authenticity.
The identification of linked wallets holding 96% of the token’s supply, some of which began selling off tokens, has further fanned the flames of investor fury.
Despite these concerns, Welch has stood by the project, stating that it was more than just a money-making venture.
Welch’s manager, Jonnie Forster, supported this stance, emphasizing plans to give away free tokens to followers for engagement rather than pushing for direct purchases.
Despite these efforts, the collapse of the token has cast doubt on the true motives behind the project.
Future Outlook
As the legal proceedings progress, the defendants, including Welch, will have the opportunity to address the allegations. If a motion for summary judgment follows and is rejected, a pretrial phase may ensue.
The plaintiffs have requested a jury trial, which, if approved, could lead to a jury determining damages in the event of a successful lawsuit.
Irrespective of the outcome, this case highlights the risks associated with celebrity-backed cryptocurrency ventures and raises broader questions about transparency and accountability in the digital currency realm.
Commenting on this issue, Ethereum co-founder Vitalik Buterin has recently condemned meme coins endorsed by celebrities, advocating for more substantial cryptocurrency projects.