“Hawk Tuah Girl” Meme Coin Developers Face Legal Battle After Token Crashes by 91%

From a viral sensation to a hotly anticipated meme coin, “Hawk Tuah Girl” is now the subject of a legal battle.

Viral social media sensation Haliey Welch, better known as “Hawk Tuah Girl,” has inspired a new wave of digital asset enthusiasts with the launch of the $HAWK token. However, the highly anticipated entry into the meme coin scene has attracted more than just investors.

The token, named after Welch's viral meme, faced legal challenges after being filed in the US District Court for the Eastern District of New York.

The legal storm centers on the $HAWK token, which saw a massive surge in value immediately after its launch. The token briefly hit a market valuation of $490 million on Wednesday before dropping by 91%, with an updated market cap of $41.7 million.

Following the token's launch, a group of more than a dozen investors quickly filed a complaint against Alex Larson Schulz, Overhere Limited, Clinton So, and the Tuah The Moon Foundation.

The investors filed the complaint against the defendants for violating existing federal securities laws.

The meme coin, inspired by Welch's viral video, attracted attention and gained millions of followers on social media. Her popularity led her to podcasts, where she invited guests like Wiz Khalifa and Mark Cuban.

Welch's claim to fame served as the inspiration for a cryptocurrency coin, $HAWK, which was introduced to the market on December 4th, with an initial market cap of $16.69 million.

Within hours of its launch, the meme coin soared to a market cap of $940 million. However, the surge was short-lived as it crashed by 91%, dropping to a market valuation of just $41.7 million the next day.

Hawk Tuah: Following The Meme Coin Template

Meme coins have emerged as a popular category within the cryptocurrency sector. They are defined by their connection to viral posts, internet humor, and community engagement.

One reason for meme coins' popularity is their accessibility, giving retail traders and first-time investors a chance to participate in the community.

According to reports, many of the $HAWK’s investors were first-time crypto buyers inspired by Welch's viral popularity. The lawsuit highlighted the steep decline in the token’s market value, which led to financial damages for investors.

The lawsuit, filed in a New York court, includes allegations of insider trading and that some developers intentionally abandoned the project after raising and profiting from the token's price.

‘Hawk’ Token An Unregistered Security?

The complainants argued that the token showed the characteristics of an unregistered security based on previous legal decisions and cases.

They added that the project's developers used Welch's popularity and social media engagement to market the token and create unique branding.

The complainants further argued that the token's initial success was based on Welch's entrepreneurial skills and almost zero investor participation.

Meanwhile, market commentators say that the $HAWK’s collapse and allegations of insider trading may undermine current and future crypto projects.

According to George Georgiades of Borderless Innovations Lab Inc., meme coins have raised specific issues that the Securities and Exchange Commission has not addressed in the past.

Haliey Welch, also known as "Hawk Tuah Girl," became a viral sensation after posting a video of herself dancing to Wiz Khalifa's "Black and Yellow" on TikTok in March 2022.

The clip, which has garnered over 100 million views, quickly turned Welch into a meme and attracted attention from various celebrities, including Khalifa himself.

Welch's newfound fame has not only brought her a massive following on social media but has also inspired a new cryptocurrency token, called $HAWK.

The token, which was launched on Tuesday, soared in value and briefly hit a market valuation of $490 million on Wednesday before dropping by 91%, with an updated market cap of $41.7 million.

According to reports, more than a dozen investors immediately filed a complaint against Alex Larson Schulz, Overhere Limited, Clinton So, and the Tuah The Moon Foundation over the token's launch.

The investors filed the complaint with the US District Court for the Eastern District of New York, alleging that the defendants violated existing federal securities laws.

The complaint further states that Haliey Welch, who inspired the meme coin, was not included in the suit.

The meme coin, inspired by Welch's viral video, attracted attention and gained millions of followers on social media. Her popularity led her to podcasts, where she invited guests like Wiz Khalifa and Mark Cuban.

Welch's claim to fame served as the inspiration for a cryptocurrency coin, $HAWK, which was introduced to the market on December 4th, with an initial market cap of $16.69 million.

Within hours of its launch, the meme coin soared to a market cap of $940 million. However, the surge was short-lived as it crashed by 9