A group of investors has filed a federal lawsuit against the creators of the Hawk Tuah ($HAWK) memecoin, alleging significant financial losses following the token’s dramatic crash shortly after its launch on December 4, 2024. The lawsuit, filed on December 19, accuses the defendants of promoting and selling unregistered securities and engaging in misleading marketing practices.
The Hawk Tuah memecoin debuted with a market capitalization of approximately $16.6 million but saw its value skyrocket to $491 million within hours of its launch. This meteoric rise was short-lived, as the token’s value plummeted by over 90%, leaving investors with substantial losses. By the end of the day, the market cap had fallen to approximately $60 million.
Investors and analysts characterized the launch as a “pump-and-dump” scheme. This sentiment was fueled by allegations stating connected wallets held 96% of the token’s supply, with significant amounts reportedly sold off during the token’s initial surge.
The lawsuit names several defendants, including OverHere Ltd., Tuah The Moon Foundation, and individuals Clinton So and Alex Larson Schultz (also known as “Doc Hollywood”). The plaintiffs, represented by Burwick Law, claim these corporations leveraged the influence of social media star Hailey Welch to generate buzz about the token. Welch, who gained popularity earlier this year with a viral TikTok video, was chosen as the project’s face.
“The project clearly targeted the U.S. market by tying the token’s success to Welch’s reputation,” the plaintiffs argued. “This led many to believe they were effectively investing in share-like assets.” Despite her major participation, Welch is not named as a defendant.
Court filings reveal the pre-sale of the token raised $2.8 million before its launch. Following the token’s collapse, Clinton So allegedly moved Tuah The Moon Foundation offshore and sold 17% of the tokens through it to avoid U.S. securities regulations. OverHere Ltd. claimed it did not profit from the project, stating Doc Hollywood controlled key aspects, including fees and treasury decisions but failed to fulfill his responsibilities.
The controversy has drawn widespread criticism of Welch, who faced accusations of involvement in what some termed as “money-grab scheme.” Welch denied these allegations, stating on X: “The team hasn’t sold a single token. We tried to deter snipers by imposing high fees at launch.” Welch has since remained silent on social media, fueling speculation about her role in the project.
Crypto attorney Carlo D’Angelo, who is not involved in the case, commented on the situation: “This serves as a cautionary tale for influencers who lend their names to crypto ventures without fully grasping their implications.”
This situation emphasizes the hazards connected with celebrity-endorsed digital currency initiatives. Previous incidents, such as YouTuber Logan Paul’s failed CryptoZoo project, highlight the significance of transparency and accountability within the crypto space.
Meanwhile, the defendants have expressed confidence about their legal position. OverHere Ltd. declared, “We are confident we have done nothing wrong and look forward to resolving this matter in court.”
