- Investors filed a lawsuit against overHere Ltd., Clinton So, Alex Larson Schultz, and the Tuah The Moon Foundation, alleging $HAWK token was unlawfully promoted and sold without proper registration, violating securities laws.
- $HAWK token saw a brief $490 million market cap before crashing over 90% within hours of its launch, with investors seeking over $150,000 in damages for deceptive practices.
- Hailey Welch, though not named as a defendant, faces criticism for allegedly boosting the token's appeal through aggressive marketing tied to her online presence, a claim she has publicly denied.
Hailey Welch's memecoin, $HAWK token, faces legal trouble after investors filed a lawsuit Thursday accusing the creators of failing to register the cryptocurrency. The coin, which skyrocketed to a $490 million market cap before plummeting over 90% within hours of its December 4 launch, has brought intense scrutiny to Welch and her team.
Lawsuit Filed Against overHere Ltd. and Team
The lawsuit targets overHere Ltd., its founder Clinton So, social media influencer Alex Larson Schultz, and the Tuah The Moon Foundation. However, Welch herself is not named as a defendant. Investors allege the team unlawfully promoted and sold the cryptocurrency without proper registration, violating securities laws.
Court records reveal that a pre-sale for $HAWK raised $2.8 million at a valuation of $16.69 million prior to launch. After the token's crash, investors are seeking over $150,000 in damages, claiming deceptive practices fueled their losses.
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The complaint also accuses Clinton So of creating an offshore entity, the Tuah Foundation, the day after the failed launch. Allegedly, So sold 17% of the tokens through this organization while continuing to market the remaining tokens to U.S. buyers without serious restrictions.
The Role of Marketing and Online Presence in Memecoins
Memecoins, which often rely on online trends and fandoms, offer easy accessibility and low barriers to creation. Investors argue Welch’s “frenzied” marketing boosted the token’s appeal, despite its lack of regulatory compliance. According to the suit, So linked the token’s success to Welch’s online presence, implying token holders were essentially shareholders.
Welch Responds to Money-Grab Accusations
Critics have blasted Welch, a 22-year-old social media star, for allegedly participating in what they call a “money-grab” scheme. Welch denied the accusations on social media, stating her team never sold tokens or gave them away for free. She claimed high fees at launch aimed to deter speculative traders.
Meanwhile, overHere Ltd. defended its actions, with a spokesperson saying in an email that the company acted transparently and “did nothing wrong.” The company added it will let the litigation process play out in court.
Welch's Rise to Fame and Controversy
Welch rose to fame earlier this year after a viral TikTok comment catapulted her into the public eye. Since then, she has launched a merchandise line and a successful podcast, “Talk Tuah,” featuring guests like JoJo Siwa and Mark Cuban. Despite her denial of involvement in the memecoin debacle, the controversy continues to overshadow her online stardom.
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