Investors in Hailey Welch’s Hawk Tuah meme coin have filed a lawsuit against several of the asset’s producers and promoters, accusing the group of securities fraud.
The lawsuit does not name Welch herself as a defendant, and she apparently will have no direct involvement in court proceedings.
Hawk Tuah Rug Pull
The Hawk Tuah release in early December was a major scandal in the meme coin space. The HAWK token launched to huge enthusiasm and a market cap of $500 million, but it crashed after 20 minutes. According to a recent lawsuit, some of the asset’s investors are seeking legal action against the responsible parties.
“The project clearly was intended to take advantage of the American market. Despite clear indications of its status as a security, the HAWK Token was not registered by Defendants,” the lawsuit claimed.
In other words, the plaintiffs are not directly focusing on the rug pull aspect of the whole debacle. However, the Hawk Tuah launch seems to be a classic example of this scam. Some experts have even suggested that it had a chilling effect on the broader meme coin market.
Instead, they’re focusing on a few clearly sketchy traits, like the asset’s token distribution.
96% of HAWK Supply in One Cluster on Launch Day. Source: BubbleMaps
Plaintiffs claim that overHere Ltd, the company that launched Hawk Tuah, “literally said that the token holders would essentially be shareholders” despite this wildly unequal distribution. By alleging that the firm violated securities laws, this lawsuit can attack the company along a fruitful line of argument.
Although rug pulls have been on the decline in 2024, internet fame and meme coin scams can still make a potent cocktail. For example, YouTuber MrBeast recently leveraged his fame to promote shaky assets in an insider trading scheme. Even hacked celebrity accounts can boost fake meme coins.
Meme coins live and die off hype bubbles, and celebrity endorsements can turbocharge a fraudulent asset. Hailey Welch herself is not directly named in the suit, and her fortunes might not suffer even if the plaintiffs face severe consequences. Regardless, her credibility among the community will surely take a hit.
