‘Hawk Tuah’ star Hailey Welch‘s multi-million dollar memecoin disaster has gone from bad to worse after a damning lawsuit was filed Thursday.
The group behind social media star Hailey Welch’s memecoin – which dramatically crashed just hours after its launch – are being sued after failing to register the cryptocurrency, according to court records.
The lawsuit, filed by investors, accuses overHere Ltd., its founder, Clinton So, and social media influencer, Alex Larson Schultz, as well as the Tuah The Moon Foundation of unlawfully promoting and selling cryptocurrency that was allegedly never properly registered.
Memecoins, which rely on cultural references and online fandoms to gain traction, are accessible and have a low barrier to create, investors said, adding that Welch’s ‘frenzied’ marketing of the token added to its raised appeal.
Welch herself, however, is not named as a defendant in the suit.
The coin, referred to as a ‘$HAWK token,’ quickly rose to a $490 million market cap, before ultimately tanking more than 90 percent, to below $100 million, within hours of its December 4 launch.
‘Hawk Tuah’ star Hailey Welch ‘s multi-million dollar memecoin disaster has gone from bad to worse after the dubious group behind the failing cryptocurrency was issued a damning lawsuit Thursday
The coin, referred to as a ‘$HAWK token,’ quickly rose to a whopping $490 million market cap, before ultimately tanking more than 90 percent within hours of its December 4 launch.
Now, the plaintiff’s lawyers allege that a pre-sale for the coin had raised approximately $2.8 million, at a valuation of $16.69 million, ahead of the launch date, according to the lawsuit.
Investors are now seeking more than $150,000 in damages.
The Thursday complaint also alleges that the day after the failed launch, So – who initially launched the coin – made the Tuah Foundation an off-shore entity and sold 17 percent of the tokens through the organization to a subset of people to skirt securities laws.
However, defendants continued marketing the remaining 83 percent of the tokens, making ‘no serious attempt’ to restrict purchasers outside of the US.
‘The project clearly was intended to take advantage of the American market,’ the complaint said.
By So ‘linking the success of the social media influencer like Welch, he literally said that the Token holders would essentially be shareholders,’ the investors said.
‘Despite these clear indications of its status as a security, the $HAWK Token was not registered by defendants,’ they added.
‘We have been extremely transparent about the limited scope and extent of our involvement in the Hawk Tuah token project. We are confident that we have done nothing wrong,’ a spokesperson for overHere said in an email.
The failed memecoin was inspired by the internet celebrity who was launched into the spotlight earlier this year following a cheeky comment during a TikTok video that went viral
Welch has since faced harsh backlash online as critics accuse the 22-year-old and her team of participating in the ‘money-grab’ scheme, which she later denied on X
‘As for any litigation, we will let the process play out in court.’
Welch has since faced harsh backlash online as critics accuse the 22-year-old and her team of participating in the ‘money-grab’ scheme, which she later denied on X.
‘Copy and pasting: Hawkanomics: Team hasn’t sold one token and not 1 KOL was given 1 free token We tried to stop snipers as best we could through high fee’s in the start of launch on @MeteoraAG. Fee’s have now been dropped,’ she posted.
‘We tried to stop snipers as best we could through high fee’s in the start of launch on.’
The failed memecoin was inspired by the internet celebrity who was launched into the spotlight earlier this year following a cheeky comment during a TikTok video that went viral.
She has since made the most of her stardom as she launched custom merchandise company and a hit podcast, ‘Talk Tuah’, which has featured comedians like Hannah Berner and Whitney Cummings, pop star JoJo Siwa, and entrepreneur Mark Cuban.
