Frustrated depressed man holding head in hands shocked when global stock market going down.

Key Takeaways:

Investors filed a lawsuit against Hawk Tuah (HAWK) creators, alleging the token was part of an unregistered securities offering, citing misleading marketing and insider profits.
HAWK’s market cap surged from $16.6M to $491M after launch but plummeted by over 90%, sparking accusations of a pump-and-dump scheme.
Influencer Hailey Welch denies insider trading claims, while commentators like Coffeezilla argue the controversy may involve exaggerated figures.

Investors have filed a lawsuit against the creators and promoters of the Hawk Tuah (HAWK) memecoin, alleging it was sold as part of an unregistered securities offering.

The legal complaint, submitted on December 19, names entities including Tuah The Moon Foundation, OverHere Ltd, and individuals Clinton So and Alex Larson Schultz.

A group of investors is suing Hawk Tuah Coin team for the “unlawful promotion and sale” of the HAWK token.

The official defendant named in the suit includes the “Tuah The Moon Foundation”. We are in the most insane timeline lol pic.twitter.com/mTUUnK9Q5H
— Trung Phan (@TrungTPhan) December 19, 2024

Plaintiffs accuse them of promoting HAWK as more than a speculative asset, framing it as a cultural movement with significant growth potential.

Social media influencer Hailey Welch, also linked to the project, is alleged to have signaled trust in the project through her reputation, though she denies allegations of insider trading or profiting unfairly.

Hawk Tuah launched on December 4 with an initial market capitalization of $16.6 million.

Its value skyrocketed to $491 million within hours before plummeting by over 90%, sparking accusations of a pump-and-dump scheme.

Investors filed complaints with the SEC, urging regulatory action.

Popular crypto commentator Coffeezilla challenged claims of a $500 million rug pull or Welch’s alleged $50 million profit, highlighting pre-sales to strategic advisers who sold shortly after the launch.

The case underscores persistent regulatory challenges around token offerings, navigating the boundary between innovation and potential securities law violations.