Hawk Tuah Investors Are Taking the Creators of the Memecoin to Court After It Lost 95% of Its Value

The lawsuit was filed by Burwick Law with a federal court on December 19, 2024. It allegedly says that the defendants wrongly touted and sold the unregistered cryptocurrency.

Investors in the Hawk Tuah token are suing its creators after the memecoin lost over 95% of its value within hours of launching.

The memecoin launched on December 4, 2024, with an initial market cap of $490 million, but dropped to $60 million in a day.

The lawsuit, filed by Burwick Law in a federal court on December 19, 2024, alleges that the defendants sold the unregistered cryptocurrency as part of an illegal enterprise.

The lawsuit names several individuals and entities involved in the project, including Tuah The Moon Foundation, OverHere Ltd., and key figures Clinton So and Alex Larson Schultz.

According to the plaintiffs, the defendants engaged in aggressive marketing tactics, leveraging the popularity of Hailey Welch on social media to create a surge in demand that drove the coin's value up rapidly, followed by a steep decline that wiped out many investors.

The court documents allege that the defendants promoted the $HAWK token on social media, and Welch ran a podcast called "Talk Tuah," where she hosted high-profile guests like Mark Cuban.

Attorneys representing the investors claim that these promotions misled new crypto users, who were attracted to the project due to Welch's fame. Many of those investors, who believed in the promises of future growth, suffered major losses when the value suddenly crashed.

Welch became known as "Hawk Tuah Girl" after a viral interview where she uttered the phrase "hawk tuah." She capitalized on her fame by creating her own merchandise line and podcasts, but her involvement in the $HAWK token project has sparked controversy.

Despite the crash, Welch continued to show support for the project. In an interview with Fortune on December 4, 2024, she stated that the memecoin was "not just a cash grab" and highlighted that it was a way for her to connect with her fans.

The lawsuit alleges that Welch and her team did not sell any of their own tokens or instruct others to purchase them. However, some investors and critics have accused Welch's team of engaging in a "pump and dump" scheme, where an individual artificially inflates the value of a coin before selling it for profit, leaving investors with worthless tokens.