SEC Closes Its Investigation Into "Hawk Tuah" Girl, Finding No Case of Fraudulent Conduct

Hailey Welch, popularly known as the “Hawk Tuah” girl, has been officially cleared of any illegality by the U.S. Securities and Exchange Commission (SEC).

Hailey Welch, famously known as the “Hawk Tuah” girl, has officially been cleared of any wrongdoing by the U.S. Securities and Exchange Commission (SEC). The regulator has closed its probe into the influencer’s reputational meme coin, $HAWK, discovering no case of fraud or ill intent on Welch’s part.

The $HAWK token, which soared to a peak valuation of $500 million before crashing by 95% in just 20 minutes, sparked widespread rumors of a pump-and-dump operation. However, upon a thorough review, the SEC concluded that Welch had not engaged in any illegal activities related to the token’s launch and subsequent price movements.

Its rollout was met with fervent buzz, propelling the market valuation of $HAWK to the hundreds of millions almost immediately. However, within just a few hours, the price of the token dropped to levels below $60 million, leaving many investors holding onto huge losses. This sharp price decline spawned theories of market manipulation, with many speculating the token creators were behind a prototypical pump-and-dump plot.

Despite these accusations, the SEC has now closed its probe without levying any charges or financial penalties against Welch. Confirming the closure of the investigation, and the lack of any charges or sanctions, Welch simply stated, “The investigation is closed, and I will not face any charges or monetary sanctions.”

A primary factor in the SEC’s determination was its recent assertion that meme coins are not securities, an argument that went a long way in impacting the decision of the investigation, as it indicated that $HAWK was not within the jurisdiction of the SEC.

However, the broader discussion over regulatory oversight of meme coins persists. A majority within the financial and crypto industries are still concerned by the frequency of so-called “rug pulls,” where creators of projects abandon tokens after profiting from their initial run-up. The lack of clear rules leaves investors vulnerable to substantial losses, and calls for stricter regulation continue to rise.

Legal commentators and finance analysts have responded to the SEC’s ruling with differing perspectives on its implications. Former SEC attorney Marc Fagel explained that the SEC’s ruling did not indicate Welch was acquitted of any misconduct. Rather, he noted that “the SEC did not find ‘no wrongdoing.’ That’s not something the SEC ever says when closing an investigation.” Instead, the present administration has stated that meme coins are not securities and therefore the SEC does not have jurisdiction.

Similarly, legal commentator James Murphy, nicknamed Metalawman, noted that the SEC’s action was not surprising, adding that meme coins are usually not treated as securities, so the SEC wouldn’t have jurisdiction. He elaborated, “The SEC is concentrating on its fundamental roles these days. If there was fraud involved in the launch, criminal prosecutors or state consumer protection agencies might investigate.”

While Welch has so far escaped legal action from the SEC, the saga over $HAWK has reignited debates about the need for more stringent regulations in the cryptocurrency market. As meme coins continue to be a source of fascination and speculation, regulators and investors alike are being forced to navigate an increasingly complex financial environment.

Although Welch has put the SEC’s inquiry behind her, the crypto world remains divided on how to classify and treat these volatile instruments. Whether stricter regulation will be implemented remains to be seen, but one thing is certain: meme coins are here to stay, and they present both opportunities and dangers for investors around the world.