Hawk Tuah meme coin investors file lawsuit against project team after 90% token crash. Legal action targets Overhere Ltd following allegations of deceptive practices and insider trading.
The team behind the Hawk Tuah meme coin project is facing a lawsuit from disgruntled investors after a devastating crash in the token’s value.
On Thursday, Bloomberg Law reported that the investors alleged that the project, which launched the $HAWK token in early December, engaged in deceptive practices that caused them to suffer significant financial losses. The lawsuit accuses the promoters of orchestrating a “rug pull,” a common cryptocurrency scam where project developers suddenly withdraw funds and abandon the project. In this case, the alleged scheme caused the token’s value to plummet by 90%, leaving investors with virtually worthless assets.
The $HAWK token was introduced into the crypto market as part of the Hawk Tuah meme coin project, spearheaded by Haliey Welch, a public figure with a large online following. She conducted aggressive promotions of the token to the public using her podcasts and social media platforms.
As a result, the token gained traction, drawing in fans and first-time crypto investors who believed in her. Despite its promising start, the token’s value dropped drastically, leaving many investors in financial ruin.
The collapse of $HAWK sparked outrage among its community, with accusations of foul play spreading rapidly on social media. Crypto investigator Coffeezilla called the launch “one of the most miserable, horrible launches,” alleging insider trading linked to accounts associated with the project’s creators.
Many investors voiced their anger, claiming they were misled by the project’s promotional strategies and Welch’s involvement, which lent credibility to the token.
Angry Investors has now taken the matter to court. According to reports, the lawsuit was targeted at Overhere Ltd, the company behind the token, its executive Clinton So, and promoter Alex Larson Schultz.
The plaintiffs claimed that the defendants unlawfully promoted and sold the $HAWK token to US investors without proper registration from the Securities and Exchange Commission (SEC), violating federal securities laws.
The filing alleged that the project used Welch’s celebrity status to create a speculative frenzy, leading to a spike in the token’s value before its rapid decline.
According to the lawsuit, many investors were new to the crypto market and relied on the project’s roadmap and Welch’s public endorsements. Attorneys representing the plaintiffs argue that these factors misled investors, causing substantial damages when the token’s value crashed.
Meanwhile, despite Welch’s prominent role in promoting the project, she is notably absent from the list of defendants in the lawsuit.
This controversy follows a series of high-profile crypto failures, drawing comparisons to Logan Paul’s troubled CryptoZoo project. The popular YouTuber is currently facing a lawsuit in the United States for misleading investors. The complaint claimed he promoted the project without disclosing he had a financial interest in the token.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
