Hailey Welch, widely recognized as the “Hawk Tuah Girl,” has been notably absent from the public eye for the past two weeks, sparking a significant wave of controversy surrounding her cryptocurrency endeavor, the Hawk Tuah (HAWK) memecoin. Welch, who rose to fame through her engaging podcast “Talk Tuah,” last reached out to her audience with a cryptic message stating she was “going to sleep.” This message was followed by a dramatic 95% drop in the value of her memecoin.
Investors Take Legal Action Against Hailey Welch for Alleged Memecoin Fraud
The aftermath of the swift decline in the Hawk Tuah token has been intense, with disgruntled investors opting for legal recourse against Welch and several associated entities. A lawsuit has been filed representing the affected investors, accusing Welch, the Tuah The Moon Foundation, OverHere Ltd., its executive Clinton So, and coin promoter Alex Larson Schultz of orchestrating a deceitful “rug pull.”
Details of the Lawsuit
The complaint, as detailed in court documents obtained by Newsweek, alleges that the “unlawful promotion and sale” of the Hawk Tuah memecoin resulted in substantial financial losses, particularly affecting novice cryptocurrency investors. The lawsuit underscores that many investors were drawn to the Hawk Tuah project due to Welch’s public endorsement and her pivotal role in its development roadmap. It states, “The rapid decline in the token’s value caused substantial damages to investors who relied on Welch’s participation and the project’s stated roadmap.”
Initially, the Hawk Tuah token garnered attention as part of a wave of community-driven memecoins, buoyed by Welch’s vigorous promotion across various social media platforms and her podcast. However, allegations of mismanagement and deceptive practices quickly emerged after the token’s value collapsed almost overnight, wiping out millions of dollars in investor funds.
Allegations of Insider Trading Emerge
Bitcoinist reported two weeks ago on accusations made by on-chain investigator Coffeezilla, who alleged that Hailey Welch and the Hawk Tuah team had deceived investors following the token’s launch. On November 26, Welch had announced her partnership with the Web3 platform OverHere to launch the Hawk Tuah memecoin, claiming it would “set to redefine the crypto space.”
Upon its launch on December 4, the token’s market capitalization soared to $500 million, only to plummet 88% within minutes as major holders swiftly liquidated their assets. As the token’s value collapsed, investors and market analysts raised alarms about potential insider trading and a coordinated rug pull orchestrated by the project’s creators. Many of the impacted investors were Welch’s fans, many of whom were new to the crypto landscape.
Revelations and Reactions
In response to the backlash, Welch unveiled the token’s “Hawkanomics,” revealing that only 2% of the total supply was allocated for public distribution, while 17% was designated for a “strategic allocation” that was fully unlocked at launch and allegedly directed to insider wallets. During a discussion on X Space, Coffeezilla confronted the Hawk Tuah team regarding over $1 million in fees generated from the token and questioned their handling of the situation. He suggested that the sell-off was not merely the result of market manipulation but rather linked to insider trading related to the creators’ accounts.
Despite the team’s denials, Coffeezilla criticized the launch as one of the worst he has reviewed, labeling the tokenomics as “horrible” and calling for accountability concerning the presale funds, which amounted to approximately $16.69 million. The daily chart shows the total crypto market cap value at $3.29 trillion.
