Hailey Welch Faces Lawsuit After Hawk Tuah Memecoin Plummets 95%
Hailey Welch, known as the "Hawk Tuah Girl," has been absent for two weeks, raising controversy about her cryptocurrency project, the Hawk Tuah (HAWK) memecoin. Her last communication indicated she was "going to sleep," shortly before the token's value dropped by 95%.
Investors Sue Hailey Welch Over Alleged Memecoin Fraud
The decline in the Hawk Tuah token has prompted legal action against Welch and associated entities. A lawsuit claims that Welch, the Tuah The Moon Foundation, OverHere Ltd., executive Clinton So, and promoter Alex Larson Schultz conducted a fraudulent "rug pull."
Court documents obtained by Newsweek allege that the "unlawful promotion and sale" of Hawk Tuah resulted in significant financial losses, impacting primarily new cryptocurrency investors. The complaint states that many were drawn to the project due to Welch's public endorsement and influential role in development. It notes that the token’s rapid decline caused substantial damages for those relying on Welch’s participation and the project's roadmap.
The Hawk Tuah token initially gained traction as part of a community-driven memecoin trend, supported by Welch’s extensive social media promotion and podcast presence. However, allegations of mismanagement emerged after the token's value collapsed, erasing millions in investor funds.
Insider Trading Allegations
Bitcoinist reported accusations from on-chain investigator Coffeezilla, who alleged that Welch and the Hawk Tuah team scammed investors post-launch. On November 26, Welch announced her partnership with OverHere to launch the Hawk Tuah memecoin, claiming it would "redefine the crypto space."
Upon launching on December 4, the token's market capitalization reached $500 million but fell 88% within minutes as major holders sold off their assets. Investors raised concerns about potential insider trading and a coordinated rug pull by the creators, particularly affecting Welch's fans who were new to cryptocurrency.
After the backlash, Welch introduced 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” fully unlocked at launch and allegedly directed to insider wallets. During an X Space discussion, Coffeezilla confronted the team regarding over $1 million in fees generated from the token, suggesting a link between the sell-off and insider trading related to the creators’ accounts.
Despite denials from the team, Coffeezilla criticized the launch as one of the worst he reviewed, labeling the tokenomics as “horrible” and calling for accountability concerning approximately $16.69 million in presale funds.
Featured image from Yahoo, chart from TradingView.com