Developers of Viral $HAWK Token Hit with Lawsuit After Sudden Collapse
The rise and catastrophic fall of the $HAWK cryptocurrency token have culminated in a lawsuit filed in Brooklyn federal court. Twelve investors, alleging financial losses totaling $151,000, claim the coin’s creators violated securities laws and manipulated the market, leaving buyers with virtually worthless assets.
The token, launched on Dec. 4 with a market capitalization of $16.69 million, saw its value skyrocket to nearly $500 million before crashing back down within hours. The fallout has sparked outrage among retail investors and renewed scrutiny of influencer-driven cryptocurrency projects.
The $HAWK token was inspired by Hailey Welch, a Tennessee woman who achieved viral fame earlier this year as the “Hawk Tuah Girl.” Welch gained prominence after a street interview at Nashville’s CMA Music Festival, where she coined the term “hawk tuah” in a humorous quip that quickly became an internet sensation.
Following her rise to fame, Welch leveraged her growing social media influence—amassing over 2.5 million Instagram followers—and launched a podcast, Talk Tuah, featuring high-profile guests like Mark Cuban and Wiz Khalifa. Although Welch has not posted about $HAWK on X (formerly Twitter) since its launch, her association with the project fueled significant investor interest.
A Classic “Rug Pull”?
The lawsuit names several entities and individuals behind the token, including overHERE Ltd., Tuah the Moon Foundation, executive Clinton So, and Los Angeles-based promoter Alex Schultz. Welch herself is not named in the complaint, but the plaintiffs argue her persona was instrumental in marketing the token as a community-oriented project.
“Many of the investors were first-time cryptocurrency participants drawn to the project through Welch’s involvement,” the complaint states. It alleges that the defendants misrepresented the token’s roadmap and engaged in insider trading by artificially inflating its value before abandoning the project.
Within 20 minutes of its peak valuation of $491 million, the token’s market cap had plummeted to under $60 million. Investors claim this rapid collapse exhibited hallmarks of a “rug pull,” a scheme where developers generate hype, inflate prices, and then sell off their holdings, draining liquidity and leaving others with devalued assets.
One investor, who goes by the handle @jiggadrin_, described the personal impact: “I put $35,000 into $HAWK after seeing Hawk Tuah’s excitement about it. Within 10 minutes, my investment was worth $2,000.”
The plaintiffs argue that $HAWK qualifies as an unregistered security under established legal precedents, citing the Howey Test—a framework used to determine whether an asset is considered a security.
The complaint further alleges that the token’s success was entirely dependent on the managerial efforts of Welch and the project’s team, with no active role for investors. This, they claim, solidifies its classification as a security, making its sale subject to U.S. securities regulations.
The Future Of Meme Coins
Meme coins like $HAWK have become a distinctive and volatile sector within the cryptocurrency market. Often driven by humor, internet culture, and celebrity endorsements, these tokens can achieve rapid success but are equally prone to sudden crashes.
The unregulated nature of the crypto market exacerbates these risks, enabling bad actors to exploit naïve investors. Unlike traditional securities, cryptocurrency projects often lack the safeguards and transparency necessary to protect participants.
The collapse of $HAWK has sparked outrage online, with many accusing Welch of deceit. However, her silence on the matter has left room for speculation. Critics argue that the incident reflects the dangers of speculative bubbles fueled by influencer-driven marketing.
“I invested my life savings and my children’s college fund because I trusted her,” one investor lamented in a now-viral post. Others mockingly called for a recession to curb such speculative behavior.
As the lawsuit proceeds, it remains to be seen whether Welch will face direct legal consequences or if the focus will remain on the project’s developers.
Information for this briefing was found via Unusual Whales and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
