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Hailey Welch, popularly known as the “Hawk Tuah Girl,” has been absent from public view for two weeks, igniting a wave of controversy surrounding her cryptocurrency project, the Hawk Tuah (HAWK) memecoin.
Welch, who gained fame through her podcast “Talk Tuah,” last communicated with her audience by stating she was “going to sleep,” shortly before the value of her memecoin plummeted by a staggering 95%.
Investors Sue Hailey Welch Over Alleged Memecoin Fraud
The fallout from the rapid decline in the Hawk Tuah token has been swift, with disappointed investors taking legal action against Welch and several associated entities.
The lawsuit, filed on behalf of affected investors, accuses Welch, the Tuah The Moon Foundation, OverHere Ltd., its executive Clinton So, and coin promoter Alex Larson Schultz of orchestrating a fraudulent “rug pull.”
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According to court documents obtained by Newsweek, the complaint alleges that the “unlawful promotion and sale” of the Hawk Tuah memecoin resulted in significant financial losses, particularly impacting those new to cryptocurrency investing.
The lawsuit emphasizes that many investors were attracted to the Hawk Tuah project due to Welch’s public endorsement and her influential role in its development roadmap. It states, “The rapid decline in the token’s value caused substantial damages to investors who relied on Welch’s participation and the project’s stated roadmap.”
Initially, the Hawk Tuah token captured attention as part of a wave of community-driven memecoins, buoyed by Welch’s “aggressive promotion” across social media platforms and her podcast.
However, allegations of mismanagement and deceptive practices soon surfaced after the token’s value collapsed almost overnight, erasing millions of dollars in investor funds.
Insider Trading Allegations
Bitcoinist reported two weeks ago that on-chain investigator Coffeezilla accused Hailey Welch and the Hawk Tuah team of scamming investors following the token’s launch.
On November 26, Welch had announced her partnership with the Web3 platform OverHere to launch the Hawk Tuah memecoin, claiming it would “set to redefine the crypto space.”
Upon its launch on December 4, the token’s market capitalization skyrocketed to $500 million, only to plummet 88% within minutes as major holders rapidly sold off their assets.
As the token’s value collapsed, investors and market analysts raised alarms about potential insider trading and a coordinated rug pull orchestrated by the project’s creators. Many of the affected investors were Welch’s fans, many of whom were new to the crypto landscape.
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In the wake of the backlash, Welch revealed the token’s “Hawkanomics,” which indicated that only 2% of the total supply was allocated for public distribution, while 17% was designated for a “strategic allocation” that was fully unlocked at launch and allegedly funneled to insider wallets.
During an X Space discussion, Coffeezilla confronted the Hawk Tuah team about over $1 million in fees generated from the token and questioned their handling of the situation. He suggested that the sell-off was not merely the result of market snipers but rather linked to insider trading related to the creators’ accounts.
Despite the team’s denials, Coffeezilla criticized the launch as one of the worst he has reviewed, labeling the tokenomics as “horrible” and calling for accountability regarding the presale funds, which amounted to approximately $16.69 million.
Featured image from Yahoo, chart from TradingView.com