Investors File Lawsuit Over Hailey Welch’s $HAWK Token Crash

Hailey Welch’s $HAWK Token Faces Legal Trouble After Memecoin Crash.

The disastrous launch of social media star Hailey Welch’s memecoin, $HAWK token, has escalated into a legal battle, with a group of investors filing a lawsuit against the creators of the cryptocurrency.

The Lawsuit and Allegations

Filed on Thursday, the lawsuit accuses overHere Ltd., its founder Clinton So, influencer Alex Larson Schultz, and the Tuah The Moon Foundation of unlawfully promoting and selling the $HAWK token without proper registration.

While Welch herself is not named as a defendant, the lawsuit highlights her “frenzied” marketing efforts, which amplified the appeal of the token before its catastrophic crash.

According to court records:

• The coin launched on December 4, initially reaching a $490 million market cap before tanking by 90% to below $100 million within hours.
• A pre-sale raised $2.8 million, valuing the token at $16.69 million before launch.
• Investors are seeking over $150,000 in damages, citing alleged violations of securities laws.

Offshore Moves and Regulatory Concerns

The complaint alleges that following the launch failure, So made the Tuah Foundation an offshore entity and sold 17% of tokens through the organization to avoid U.S. securities laws.

Defendants reportedly continued marketing the remaining 83% of tokens, with “no serious attempt” to restrict U.S. purchasers, despite implying that $HAWK token holders would act as de facto shareholders.

“The project clearly was intended to take advantage of the American market,” the lawsuit claims.

Defendant Responses

A spokesperson for overHere defended their actions:

“We have been extremely transparent about the limited scope and extent of our involvement. We are confident that we have done nothing wrong. As for any litigation, we will let the process play out in court.”

Welch’s Response and Backlash

Despite not being named in the lawsuit, Welch has faced harsh online criticism, with many accusing her of involvement in a “money-grab” scheme.

In a post on X, Welch denied allegations, stating:

“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 fees in the start of launch.”

The Rise and Fall of $HAWK Token

Inspired by Welch’s viral TikTok fame earlier this year, the $HAWK token aimed to capitalize on her popularity. The coin followed her rapid rise in the spotlight, during which she launched a custom merchandise line and the hit podcast “Talk Tuah.”

However, the lawsuit and subsequent crash have left Welch’s reputation in jeopardy, despite her continued denial of involvement in the project’s failure.

The $HAWK token controversy highlights the potential risks of investing in celebrity-backed memecoins, which often operate in a gray area of regulatory oversight. As the lawsuit unfolds, it raises important questions about accountability and the future of influencer-driven crypto projects.

This situation serves as a cautionary tale for investors navigating the unpredictable world of memecoins.