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Highlights
- Legal action follows the crash of the $HAWK memecoin.
- Allegations include unregistered promotion and sales practices.
- The lawsuit points to aggressive marketing tied to celebrity influence
The Hawk Tuah memecoin ($HAWK), linked to social media personality Hailey Welch, is facing legal action after a dramatic 95% value crash. The lawsuit alleges unlawful promotion and unregistered sales practices by its creators, raising concerns about celebrity-backed cryptocurrency projects and their compliance with regulatory standards in the evolving crypto space.
Lawsuit Targets Hawk Tuah Memecoin Crash
A lawsuit has been filed against parties associated with the Hawk Tuah memecoin ($HAWK) after the cryptocurrency lost more than 95% of its value shortly after its launch on December 4. The plaintiffs allege that the token was unlawfully promoted and sold without proper registration. The legal filing names Tuah The Moon Foundation, OverHere Ltd, and Los Angeles-based promoter Alex Larson Schultz as defendants, citing a failure to comply with regulatory requirements.
Aggressive Promotion and Market Impact
The lawsuit alleges that the token’s creators and promoters leveraged Hailey Welch’s celebrity status and social media following to generate hype around $HAWK. Welch, known as the “Hawk Tuah Girl,” gained fame through viral videos and later established herself as a podcaster and entrepreneur. Plaintiffs claim that Welch’s association with the project and appearances on her podcast added credibility to the token, which briefly saw a spike in market capitalization before its value plummeted.
Celebrity Crypto Ventures Under Scrutiny
Though Welch is not named as a defendant, the lawsuit highlights the growing risks associated with celebrity-backed cryptocurrency projects. Welch’s manager, Jonnie Forster, stated that the project was distinct from others, emphasizing that they did not encourage people to purchase the token. Instead, the team planned to distribute free tokens to fans who bought Welch’s merchandise. Forster also noted that Welch would hold 10% of the token supply, restricted from selling for one year.
Understanding the Allegations
Plaintiffs argue that the token’s creators exploited speculative interest through aggressive marketing campaigns, leading to a temporary price surge. The filing emphasizes that these practices misled participants and violated regulations governing cryptocurrency sales. The defendants are accused of using Welch’s public persona to build trust and attract buyers without fulfilling registration requirements.
