- Investors sue $HAWK crypto memecoin promoters for alleged unlawful sales and compliance violations.
- $HAWK’s 95% value drop fuels rug-pull accusations and investor outrage.
As a seasoned crypto investor with battle scars and a well-worn wallet from navigating the tumultuous waters of the digital asset market, I can’t help but feel a mix of dismay and resignation upon reading about yet another celebrity-backed memecoin debacle. The $HAWK saga is reminiscent of my early days in crypto, where I lost more than a few hard-earned coins to similar schemes that promised the moon but delivered nothing but heartache.
The dispute over the “Hawk Tuah Girl” – Hailey Welch’s case has escalated into a legal matter. Recently, investors have decided to take action by filing a lawsuit against people and organizations associated with the failed $HAWK meme cryptocurrency.
On its debut day, the 4th of December, the value of this token dropped a staggering 95%, sparking accusations of illegal marketing and sales tactics.
A filling against Hailey Welch and partners
On December 19th, according to documents submitted by Burwick Law firm, the investors claimed that the defendants had broken rules by launching and selling the token to the general public without first properly registering it with the necessary regulatory bodies.
The lawsuit alleged that aggressive promotional efforts initially drove up the token’s market value, only to plummet shortly after launch.
The filing said,
Defendants stimulated excessive marketing efforts and made claims about potential expansion, which ignited speculation and led to an immediate surge in the Token’s worth following its debut, ultimately reaching a substantial market value.
It further noted,
The defendants utilized Welch’s fame and influential network to boost the Token’s reliability and allure. They often spoke about the $HAWK project on Welch’s podcasts, which typically had high-profile guests.
To clarify, the lawsuit implicates several parties. Among them are Tuah The Moon Foundation, alleged to have overseen the funds generated by the token sale, as well as OverHere Ltd, the creators of the coin, and their CEO, Clinton So.
Moreover, Alex Larson Schultz, a memecoin promoter based in Los Angeles, has been identified as one of the main defendants in the legal proceedings.
It’s important to mention that the sharp drop in the value of HAWK cryptocurrency, losing approximately 95% of its worth from a peak market capitalization of $490 million, has led to accusations of a scam known as a “rug pull” and increased examination of its authenticity.
The discovery of linked wallets holding 96% of the token supply, some of which began offloading tokens, further fueled investor outrage.
Nevertheless, even with the raised issues, Welch advocated for the project, emphasizing that it wasn’t solely about making money.
Jonnie Forster, her manager, agreed with this viewpoint, emphasizing their strategy to gift tokens to fans for engagement instead of prompting them directly to make purchases.
Despite the efforts, the token’s collapse has left many questioning the project’s true intentions.
What lies ahead?
Currently, the legal dispute is progressing, and those accused, such as Welch, will be given an opportunity to counter the accusations. It’s worth mentioning that a request for summary judgment could be made, which might result in a pre-trial stage if this motion gets dismissed.
As a crypto investor, I’ve learned that if the plaintiffs are successful in their request, there might be a possibility of a jury trial taking place. Should this trial occur and the lawsuit prove victorious, the jury would then be responsible for deciding the appropriate compensation.
From my perspective as an analyst, this case serves as a stark reminder of the potential risks involved in celebrity-backed cryptocurrency ventures. It also brings to light more comprehensive issues regarding transparency and responsibility within the cryptocurrency market.
Speaking about the same topic, Vitalik Buterin, one of Ethereum‘s [ETH] co-creators, has also voiced his concerns over cryptocurrencies backed by celebrities, suggesting a focus on significant and impactful crypto initiatives instead.
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2024-12-20 14:16