Investors initiated a lawsuit on December 19 against multiple entities associated with the launch of the Hawk Tuah (HAWK) memecoin, accusing them of promoting and selling an unregistered securities offering.
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The legal filing identifies the defendants as the Tuah The Moon Foundation, OverHere Ltd, Clinton So, and Alex Larson Schultz, all of whom are alleged to have been involved in promoting the memecoin. In their filing, the plaintiffs’ attorneys stated:
“The pre-launch marketing for HAWK framed the Token as more than a speculative asset, portraying it as a cultural movement with significant growth potential. Welch’s involvement and her reputation as a trusted public figure signaled to her followers and potential investors that the project was poised for success.”
CryptoCaster Quick Check:
The Hawk Tuah (HAWK) memecoin experienced a meteoric rise shortly after its launch, soaring to an impressive market capitalization of approximately $491 million within hours. This initial surge was fueled by widespread enthusiasm, aggressive marketing campaigns, and speculative trading, drawing significant attention from investors eager to capitalize on the next viral cryptocurrency trend. The rapid growth created a buzz in the market, positioning Hawk Tuah as a promising new player in the memecoin space.
However, the excitement was short-lived. Within hours of reaching its peak, the memecoin’s market capitalization plummeted by over 90%, leaving many investors facing substantial losses. This sharp decline sparked concerns about the coin’s underlying stability and legitimacy, with some attributing the crash to a potential pump-and-dump scheme or the absence of fundamental value. The dramatic fall highlights the volatile nature of memecoins and underscores the risks involved in speculative cryptocurrency investments.
Read similar article of interest: Unfair Competition and Market Manipulation: Addressing Intentional Obstruction
The Rise and Fall of the Hawk Tuah Memecoin
Launched on December 4, the Hawk Tuah memecoin began with a market capitalization of approximately $16.6 million. In a dramatic turn, its price skyrocketed within hours, pushing its market cap to $491 million in just three hours. However, the surge was short-lived, as the coin’s value plummeted soon after, dropping to roughly $41.7 million.
The rapid collapse of Hawk Tuah sparked outrage among investors, who took to social media to voice their frustrations. Many labeled the event a classic pump-and-dump scheme, accusing those behind the coin of artificially inflating its value before selling off their holdings, leaving retail investors at a loss.
Some disgruntled investors filed complaints with the Securities and Exchange Commission (SEC), urging others affected by the crash to do the same. The fallout from the memecoin’s decline has since prompted increased scrutiny over its launch and the individuals associated with it.
Haliey Welch, the social media influencer who served as the inspiration for the memecoin, denied allegations of insider trading involving herself or her team. Welch faced mounting criticism as the face of the project, but she maintained her stance, distancing herself from the claims of foul play.
In response to the controversy, popular YouTuber and investigative personality “Coffeezilla” weighed in on the situation via social media. Coffeezilla aimed to clarify rumors surrounding the Hawk Tuah launch, challenging accusations that the project was a deliberate rug pull.
The YouTuber argued that the memecoin’s initial investors, described as “strategic advisers,” had pre-purchased millions of tokens, which they subsequently sold off early in the launch. While this activity contributed to the dramatic price crash, Coffeezilla emphasized that it did not constitute a traditional rug pull.
Coffeezilla further dismissed allegations of Welch personally profiting $50 million from the launch or orchestrating a $500 million scam. He described these claims as exaggerated and based on misinformation, calling for a more measured assessment of the situation.
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