Hailey Welch, the “Hawk Tuah Girl,” Sued Over Alleged Memecoin Fraud

Hailey Welch, popularly known as the “Hawk Tuah Girl,” has been absent from public view for two weeks, igniting a wave of controversy surrounding her cryptocurrency project, the Hawk Tuah (HAWK) memecoin.

Hailey Welch, known for her involvement in the Hawk Tuah (HAWK) memecoin, has been largely absent from public view in recent weeks. Her last communication with her audience was a brief statement indicating she was "going to sleep," shortly before the value of HAWK plummeted by an astonishing 95%.

This rapid decline has sparked a wave of controversy and legal actions, with investors alleging that Welch and several associates orchestrated a fraudulent "rug pull."

A lawsuit, filed on behalf of affected investors, accuses Welch, the Tuah The Moon Foundation, OverHere Ltd., its executive Clinton So, and coin promoter Alex Larson Schultz of being involved in the alleged memecoin fraud.

According to court documents obtained by Newsweek, the complaint alleges that the "unlawful promotion and sale" of the Hawk Tuah memecoin resulted in substantial financial losses, particularly impacting those new to cryptocurrency investing.

The lawsuit emphasizes Welch's role in the project, highlighting her public endorsement and involvement in the Hawk Tuah's development roadmap, which attracted many investors to the project.

"The rapid decline in the token’s value caused substantial damages to investors who relied on Welch’s participation and the project’s stated roadmap," the complaint states.

Initially garnering attention as part of a wave of community-driven memecoins, the Hawk Tuah token was aggressively promoted by Welch on social media platforms and her podcast. However, allegations of mismanagement and deceptive practices quickly surfaced after the token's value collapsed almost overnight, wiping out millions of dollars in investor funds.

Two weeks ago, Bitcoinist reported on on-chain investigator Coffeezilla's accusations against Hailey Welch and the Hawk Tuah team following the token's launch.

On November 26, Welch announced her partnership with the Web3 platform OverHere to launch the Hawk Tuah memecoin, which they claimed was "set to redefine the crypto space."

Upon its launch on December 4, the token's market capitalization soared to $500 million, but within minutes, it plummeted by 88% as major holders rapidly sold off their assets.

As the token's value crashed, investors and market analysts raised concerns about potential insider trading and a coordinated rug pull by the project's creators, with Welch's fans, many of whom were new to crypto, being among those affected by the sell-off.

In response to the backlash, Welch disclosed the token's "Hawkanomics," which revealed that only 2% of the total supply was allocated for public distribution. At the same time, a 17% 'strategic allocation' was fully unlocked at launch and allegedly funneled to insider wallets.

During an X Space discussion, Coffeezilla confronted the Hawk Tuah team about over $1 million in fees generated from the token and their handling of the situation, suggesting that the sell-off was not merely the result of market snipers but was linked to insider trading from the creators' accounts.

Despite the team's denials, Coffeezilla went on to criticize the launch as one of the worst he has reviewed, slamming the tokenomics as "horrible" and demanding accountability for the presale funds, which amounted to approximately $16.69 million.