Hailey Welch Faces Lawsuit Over $HAWK Memecoin Collapse

Hailey Welch, known for her online persona as the “Hawk Tuah Girl,” is facing serious legal consequences following the collapse of her promoted cryptocurrency, the $HAWK token. Investors who backed the project have filed a lawsuit against Welch and associated parties, accusing them of unlawfully promoting and selling unregistered cryptocurrency, leading to significant financial losses.

Defendants Named in Lawsuit

The lawsuit, filed on December 19, 2024, in the U.S. District Court for the Eastern District of New York, targets several parties behind the $HAWK token, including:

• Tuah The Moon Foundation
• OverHere Ltd.
• Clinton So (Executive of OverHere Ltd.)
• Alex Larson Schultz (Promoter of the token)

Although Welch is not named as a defendant in the suit, her role in promoting the token heavily influences the case. The plaintiffs allege that the defendants failed to properly register the $HAWK token, in violation of the Securities Act.

Alleged Negligence and Promotion of Unregistered Securities

According to the plaintiffs, the defendants’ marketing campaign, led by Welch, used her celebrity status to attract investors, many of whom were first-time cryptocurrency participants. Investors allege that the promotion created a “frenzied” market for the $HAWK token, which rapidly gained a market value of $490 million before crashing by over 90% within hours of launch. This sharp decline resulted in massive financial losses for those who bought into the token.

The lawsuit further claims that the defendants did not make a serious effort to ensure that the sale of the tokens complied with securities laws, especially targeting American investors without proper registration.

Investors Seek Damages

The lawsuit, filed on behalf of affected investors, motions damages of more than $150,000. The plaintiffs argue that the failure to register the token as a security resulted in substantial harm to those who trusted the project based on its promotional materials, particularly Welch’s heavy involvement.

Hailey Welch’s Silence Amidst Controversy

Since the collapse of the $HAWK token, Welch has made no public statements regarding the lawsuit or the crash. She has not released a new episode of her podcast “Talk Tuah” or addressed her followers on social media. This absence has led to widespread speculation regarding her involvement and whereabouts, drawing comparisons to previous cryptocurrency scandals where creators disappeared after their projects failed.

In response to initial criticism following the token’s rapid decline, Welch denied involvement in any fraudulent activities. She posted on X (formerly Twitter) claiming, “Team hasn’t sold one token,” and emphasized their attempts to curb “snipers” through high fees at launch.

Legal Implications for Crypto Promoters

The ongoing legal conflict highlights the risks involved in promoting cryptocurrency projects, particularly for celebrities like Welch. The case could set a significant precedent for how celebrity endorsements are handled within the cryptocurrency market, particularly in relation to U.S. securities law.

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FAQs

What is the lawsuit against Hailey Welch about?

The lawsuit involves Hailey Welch’s promotion of the $HAWK token, a memecoin that collapsed in value shortly after its launch. Investors have filed the lawsuit against Welch and several associated entities, alleging that they unlawfully promoted and sold the cryptocurrency without proper registration, violating U.S. securities laws.

Why is Hailey Welch being sued if she is not named as a defendant?

Although Welch is not named as a defendant in the lawsuit, her prominent role in promoting the $HAWK token and attracting investors has made her an indirect figure in the case. Investors argue that Welch’s involvement led to the “frenzied” promotion of the token, which they claim resulted in substantial financial losses.

Who else is involved in the lawsuit?

In addition to Hailey Welch, the lawsuit targets:

• Tuah The Moon Foundation
• OverHere Ltd. (The company behind the token)
• Clinton So (Executive of OverHere Ltd.)
• Alex Larson Schultz (Promoter of the token)

These entities are accused of failing to register the $HAWK token with the appropriate authorities, which is required for tokens that qualify as securities under U.S. law.

What is a “rug pull” in cryptocurrency, and is this the case with $HAWK?

A “rug pull” is a term used in the cryptocurrency world to describe a situation where the creators of a token or coin abandon the project after attracting investments, leaving investors with worthless assets. While the lawsuit does not explicitly accuse Welch and her team of a rug pull, investors have described the sudden collapse of the $HAWK token as a “fraudulent” action, similar to a rug pull.

How much money did investors lose with the $HAWK token?

The $HAWK token initially gained a market value of $490 million but quickly plummeted by over 90%, leaving investors with significant losses. The lawsuit does not specify the total amount lost by investors, but they are desiring damages of more than $150,000.

What damages are investors looking in the lawsuit?

Investors are wanting more than $150,000 in damages. The lawsuit also requests any additional compensation the court deems appropriate based on the defendants’ negligence in failing to register the $HAWK token.

What are the legal implications of this lawsuit for cryptocurrency promoters?

This case has significant implications for cryptocurrency promoters, particularly celebrities. If the court rules that the $HAWK token was marketed unlawfully, it could set a precedent for how celebrity endorsements and cryptocurrency promotions are handled in relation to U.S. securities laws. This could lead to increased scrutiny of crypto projects promoted by celebrities and influencers.

What is Hailey Welch’s response to the allegations?

Hailey Welch has denied any wrongdoing regarding the collapse of the $HAWK token. After the token’s value dropped, she posted on X (formerly Twitter) stating that her team had not sold any tokens and that they had tried to prevent “snipers” (investors who buy tokens at launch and resell quickly for a profit) through high launch fees.

What happens next in the lawsuit?

The lawsuit is still in its early stages, and more legal proceedings are expected in the coming months. The court will decide whether the defendants are liable for the unregistered sale of securities and whether Welch’s involvement in promoting the token will play a key role in the case.

How can I stay updated on the lawsuit?

You can follow the latest news about the lawsuit and Hailey Welch’s involvement through news outlets like TMZ, The Sun, and Newsweek, as they continue to report on the case’s developments. Additionally, court documents related to the lawsuit may provide further details.

Conclusion

As the lawsuit unfolds, Welch’s involvement and the legitimacy of the $HAWK token remain in the spotlight. Investors are seeking compensation for their losses, and the broader cryptocurrency community is watching closely to see how the case will impact future celebrity-driven crypto projects.