blurry group behind “Hawk Tuh” meme coin of girl Haley Welch — which crashed just hours after its launch — was sued by investors for failing to register the cryptocurrency, according to court records filed Thursday.
The coin was inspired by Welch, 22, who became internet famous after making a lewd comment during a TikTok video that went viral earlier this year. She has since capitalized on her newfound fame with custom merchandise and a podcast, “Talk Tuh”.
The lawsuit alleges that Cayman Islands-based sellers, as well as the promoters of the “$HAWK token”, used Welch’s fame to falsely promote the meme coin as a registered security.
Welch eagerly covered the launch of the meme coin on his podcast and among his 2.6 million Instagram followers.
The lawsuit, filed in the First U.S. District Court for the Eastern District of New York, names the Tuh the Moon Foundation; Overhear Limited and its founder Clinton So, who launched the coin; and social media influencer Alex Larson Schultz, also known as Doc Hollywood, as defendants.
Welch was not named in the lawsuit.
The coin reached a market capitalization of $490 million shortly thereafter Launch on 4th December – but surged by more than 90% to less than $100 million in a matter of hours.
The plaintiffs’ lawyers wrote in the lawsuit that a pre-sale of the coin ahead of the launch date had raised approximately $2.8 million at a valuation of $16.69 million.
Investors said they lost more than $151,000.
According to the complaint, the day after the coin’s turbulent launch, So made the Tuah Foundation an off-shore entity and sold 17% of the tokens through the foundation to a group of people to avoid securities laws.
The lawsuit says the vendors behind the coin continued to promote the remaining 83% of the tokens and made “no serious effort” to ensure that people buying the coins were outside the US.
“The purpose of the project was clearly to take advantage of the US market,” the complaint said.
So “virtually that said token holders will essentially be shareholders,” the plaintiff said.
But according to the lawsuit, the $HAWK tokens were never registered as a security by the defendants.
“We have been extremely transparent about the limited scope and extent of our involvement in the Hawk Tuah token project,” an Overheard spokesperson said. told Bloomberg“We are confident that we have done nothing wrong.”
Despite his “Hawk Tuh” brand bearing the coin, there has been radio silence from Welch on the controversy. He has not posted on his social media or uploaded any new podcast episodes since the coin crash.
Welch did not immediately respond to a request for comment.
