Investor lawsuit targets Hawk Tuah memecoin creators over $491M surge

Investors have filed a lawsuit against several entities linked to the launch of the Hawk Tuah (CRYPTO:HAWKTUAH) memecoin, accusing them of promoting and selling unregistered securities.

The lawsuit, filed on December 19, names the Tuah The Moon Foundation, OverHere Ltd, and individuals Clinton So and Alex Larson Schultz as defendants.

The plaintiffs claim that the HAWK token exhibits all the characteristics of an unregistered security under established legal precedent.

The legal filing asserts that the pre-launch marketing of HAWK presented the token as more than a speculative asset.

It was framed as part of a cultural movement with high growth potential.

The involvement of influencer Haliey Welch, known for her credibility, allegedly signaled to investors that the project was bound for success.

The HAWK token's market cap surged to about $491 million just hours after its launch on December 4, but soon after, the price plummeted by over 90%, falling to approximately $41.7 million.

This sharp drop led some investors to accuse the creators of a pump-and-dump scheme.

Following the collapse, many investors filed complaints with the U.S. Securities and Exchange Commission (SEC).

Haliey Welch, who had been a key promoter of the token, denied allegations of insider trading.

In a statement, she rejected claims that her team had engaged in such practices.

Popular YouTuber “Coffeezilla” also addressed the controversy, clarifying that the memecoin's launch was not a rug pull.

He explained that strategic advisers had pre-sold millions of tokens, which led to the token's significant price drop.

“Claims of a $500 million rug pull or Welch profiting $50 million from the token launch were misinformation,” Coffeezilla added.

At the time of reporting, the price of Hawk Tuah (HAWKTUAH) was $0.0003487.