Hailey Welch, star of Hawk Tuah, is facing legal trouble after a lawsuit was filed Thursday following the disastrous crash of her memecoin. The coin, which had gained a lot of attention online, fell dramatically just hours after launching.
The lawsuit was filed by investors against the company behind the coin, overHere Ltd., and its founder, Clinton So. The investors claim that the $HAWK token was sold and promoted without being properly registered, which is illegal. The lawsuit also names social media influencer Alex Larson Schultz and the Tuah The Moon Foundation, but not Hailey Welch herself.
The coin had an impressive start, reaching a $490 million market cap, but quickly dropped by more than 90%, leaving it worth under $100 million. The investors allege that a pre-sale of the token raised about $2.8 million, but this was based on an inflated valuation of $16.69 million. Now, they are seeking damages over $150,000.
The complaint also claims that So made changes to the Tuah Foundation, turning it into an offshore entity to sell 17% of the tokens, likely to avoid U.S. regulations. Despite this, the defendants continued promoting the remaining tokens to U.S. buyers, violating securities laws, according to the lawsuit.
The investors argue that So and his team misled people by linking the success of the coin to Welch’s social media influence, suggesting that token holders were like shareholders in the project. They also claim the coin should have been registered as a security but was not.
In response, a spokesperson for overHere said they’ve been transparent about their involvement and believe they did nothing wrong. As for the lawsuit, they plan to let the legal process unfold.
Meanwhile, Welch has faced criticism online but denied being part of any “money grab” scheme, explaining that her team tried to prevent people from buying tokens too quickly.
