Investors have initiated legal proceedings against the developers of the Hawk Tuah (HAWK) memecoin following the token’s abrupt price decline, which resulted in substantial losses for numerous investors. On December 19, the lawsuit accuses several individuals and organizations of promoting an unregistered security and misleading investors.
The suit contains the names of Clinton So, proprietor of OverHere Ltd, Tuah The Moon Foundation, and influencer Alex Larson Schultz. The plaintiffs contend that the pre-launch marketing of the memecoin misrepresented it as a cultural movement, rather than a speculative asset, which incentivized investors to view it as a legitimate opportunity for growth.
The HAWK token’s market capitalization surged to nearly $500 million within hours of its launch on December 4, only to plummet by more than 90% shortly thereafter, prompting numerous investors to query the project’s legitimacy. The rapid decline has elicited a backlash, with some asserting that the launch was a classic “pump-and-dump” scheme.
The lawsuit also underscores concerns regarding the concentration of the HAWK token supply, as only a handful of wallets held 96% of the tokens at the time of commencement. Furthermore, the legal filing asserts that the coin’s promoters attempted to structure the project in a manner that would circumvent U.S. securities laws, despite the fact that the token was widely accessible to American investors.
Haliey Welch, the social media influencer responsible for the Hawk Tuah persona, has refuted allegations of insider trading and financial gain from the coin’s inception. However, she has since disassociated herself from the controversy by discontinuing her podcast and refraining from public appearances in the wake of the collapse.
The real nature of the Hawk Tuah memecoin and its creators is still uncertain as the legal battle progresses, with investors seeking compensation for their losses.
