Investors have taken a significant step by suing those associated with a cryptocurrency launched by Hawk Tuah Girl Hailey Welch. This move comes in the wake of the crash of the memecoin named after her. On December 4, when it was released, the coin lost an astonishing 95 percent of its value in a single day. In their December 19 court filing, the lawyers for the investors stated that the lawsuit "arises from the unlawful promotion and sale of the Hawk Tuah cryptocurrency memecoin, known as the “$HAWK” token (the “Token” or “$HAWK”), which Defendants offered and sold to the public without proper registration."

Key Players in the Lawsuit

Among those named in the suit are the Tuah The Moon Foundation, which handled the money from the sale of the meme coin. Also included are the coin's creator, OverHere Ltd, and its executive, Clinton So, as well as the meme coin's Los Angeles-based promoter, Alex Larson Schultz.

How Welch's Fame Led to the Lawsuit

Welch rose to fame when she was filmed by YouTube creators using the onomatopoeic phrase "hawk tuah" in a sexual context. This newfound fame was transformed into a successful merchandise line and a podcast, Talk Tuah, which featured notable business people like Mark Cuban. The plaintiff attorneys claim in their filing that through aggressive promotional campaigns and promises of future growth, Defendants created a speculative frenzy that caused the Token's market value to spike shortly after launch, reaching a significant market capitalization. They leveraged Welch's celebrity status and connections to enhance the Token's credibility and appeal, discussing the $HAWK project during Welch's podcasts featuring notable guests.

The Nature of a Memecoin

A memecoin is a type of cryptocurrency typically launched on the back of a popular internet meme or recurring joke. In this case, Welch is not named as a defendant in the federal court case in the eastern district of New York. Haliey Welch appeared at SiriusXM Studios on July 31, 2024, in Los Angeles. Investors are suing the makers of the cryptocurrency promoted by Welch. Lawyers for the investors also state in their filing that Defendants leveraged the extensive social media following of Hailey Welch, a prominent social media personality known as the “Hawk Tuah Girl,” to market the Token as a groundbreaking cryptocurrency project. Many of the investors were first-time cryptocurrency participants drawn to the project through Welch's involvement. The rapid decline in the Token's value caused substantial damages to those investors who relied on Welch's participation and the project's stated road map.

What's Next for the Lawsuit

The defendants will be given the opportunity to reply to the lawsuit and may seek a summary judgment in their favor. If the judge does not grant summary judgment, pretrial motions will commence. The plaintiffs are seeking a jury trial, and if granted, a jury would decide damages if the lawsuit is successful.