$HAWK Investors File Lawsuit for $151K Losses After 90% Crash

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...

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December 19, 2024

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Burwick Law has filed a federal lawsuit in the United States on behalf of investors against the creators of the Hawk Tuah ($HAWK) meme coin following claims of a rug pull that caused significant financial losses.

The lawsuit comes after allegations of fraudulent practices surfaced shortly after the token’s launch in early December.

Investors File Lawsuit After Hawk Tuah Token Crash: $151,000 in Losses Reported

The Hawk Tuah token, promoted by influencer Haliey Welch, quickly gained traction among fans. Welch, who rose to fame earlier this year as the “Hawk Tuah girl,” became the face of the project.

However, the token’s value plummeted soon after its launch, sparking outrage on social media and accusations of deceit.

The $HAWK token initially reached a peak market capitalization of $490 million but lost 93% of its value shortly after. Allegations of a rug pull quickly surfaced.

Adding to the controversy, reports revealed that connected wallets held 96% of the token supply. Some of these wallets were allegedly involved in selling, further fueling investor outrage.

Two weeks after the crash, Burwick Law confirmed filing a lawsuit. It represents 12 U.S.-based plaintiffs who claim to have collectively lost over $151,000.

Burwick Law had previously called on affected investors to come forward via a Twitter post.

The lawsuit names four defendants: Alex Larson Schultz (known as Doc Hollywood), OverHere Limited, Clinton So, and Tuah the Moon Foundation.

Interestingly, Haliey Welch, whose celebrity status helped draw investors, is not named as a defendant.

According to the filing, the defendants leveraged Welch’s public image to create a speculative buzz, briefly causing the token’s market capitalization to spike before collapsing.

Many investors, particularly first-time cryptocurrency participants, were drawn to the project due to Welch’s involvement and public endorsement during her podcasts.

The lawsuit alleges the project failed to deliver on its promises, leading to significant financial losses for those who relied on its roadmap and Welch’s credibility.

Haliey Welch Faces Backlash After Abrupt Exit from X Spaces Amid $HAWK Controversy

Crypto attorney Carlo D’Angelo, who is not involved in the case, weighed in on the lawsuit. He described it as unsurprising given the attention the token launch and subsequent crash received.

D’Angelo said:

“It’s a cautionary tale for influencers and celebrities who lend their names to crypto projects.”

On the launch day, Welch and the project’s representatives addressed angry investors during a live X Spaces event.

Welch defended the token but abruptly ended her participation, saying she needed to sleep. She has not posted on social media since.

Following the launch debacle, HAWK’s market cap dropped to $7.7 million, a 23.5% decline in a single day. A community note attached to a widely viewed X post suggested Welch may face legal consequences.

Adding to the drama, OverHere Limited broke its silence on Monday. The company claimed it had earned no profit from the project and asserted that its involvement was contractual.

OverHere alleged that Doc Hollywood controlled key aspects of the token, including fees and treasury decisions, but did not fulfill his responsibilities.

This case is not an isolated incident in the cryptocurrency space. Similar controversies have erupted in the past, such as the failed CryptoZoo project led by YouTuber Logan Paul.