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Burwick Law has initiated a federal lawsuit in the United States on behalf of investors against the developers of the Hawk Tuah ($HAWK) meme coin, following allegations of a rug pull that resulted in substantial financial losses.
The legal action arises after claims of fraudulent activities emerged shortly after the token’s introduction in early December.
Investors Launch Lawsuit Following Hawk Tuah Token Collapse: $151,000 in Reported Losses
The Hawk Tuah token, which was promoted by influencer Haliey Welch, rapidly gained popularity among supporters. Welch, who gained recognition earlier this year as the “Hawk Tuah girl,” became synonymous with the project.
However, the token’s value sharply declined shortly after its debut, inciting outrage on social media and allegations of dishonesty.
The $HAWK token initially achieved a peak market capitalization of $490 million but subsequently lost 93% of its value. Claims of a rug pull emerged swiftly.
Burwick Law has filed a federal lawsuit on behalf of investors in the HAWK TUAH memecoin, $HAWK.
Learn more below. pic.twitter.com/ChKYhjBGf1— Burwick Law (@BurwickLaw) December 19, 2024
Compounding the controversy, reports indicated that associated wallets controlled 96% of the token supply. Some of these wallets were reportedly involved in selling, further intensifying investor discontent.
Two weeks post-crash, Burwick Law confirmed the lawsuit’s filing. It represents 12 plaintiffs based in the U.S. who claim to have collectively incurred losses exceeding $151,000.
Burwick Law had previously urged affected investors to step forward through a Twitter announcement.
The lawsuit identifies four defendants: Alex Larson Schultz (known as Doc Hollywood), OverHere Limited, Clinton So, and Tuah the Moon Foundation.
Notably, Haliey Welch, whose celebrity status attracted investors, is not included as a defendant.
The filing asserts that the defendants exploited Welch’s public persona to generate speculative interest, briefly inflating the token’s market capitalization before its decline.
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Numerous investors, especially those new to cryptocurrency, were attracted to the project due to Welch’s involvement and her public endorsements during her podcasts.
The lawsuit claims that the project did not fulfill its promises, resulting in significant financial losses for those who depended on its roadmap and Welch’s credibility.
Haliey Welch Faces Criticism After Sudden Departure from X Spaces Amid $HAWK Controversy
Crypto attorney Carlo D’Angelo, who is not part of the case, commented on the lawsuit, stating that it was expected given the attention surrounding the token’s launch and subsequent decline.
D’Angelo remarked:
“It’s a cautionary tale for influencers and celebrities who lend their names to crypto projects.”
On the day of the launch, Welch and representatives of the project addressed frustrated investors during a live X Spaces event.
Welch defended the token but abruptly concluded her participation, citing a need for sleep. She has not made any social media posts since.
Following the launch issues, HAWK’s market cap fell to $7.7 million, marking a 23.5% drop in just one day. A community note linked to a widely circulated X post suggested that Welch might face legal repercussions.
There has been a wild amount of fud circulating, let us explain:
The main piece going around @X is the 96% cluster seen on @bubblemaps which shows $HAWK tokens being sent by the deployer address (xxxx), to the related addresses, according to the tokenomics that was published.…— overHere (@overHere_gg) December 5, 2024
In a further development, OverHere Limited broke its silence on Monday, stating that it had not profited from the project and claimed its involvement was contractual.
OverHere alleged that Doc Hollywood controlled critical aspects of the token, including fees and treasury decisions, but failed to meet his obligations.
This case is not an isolated occurrence in the cryptocurrency sector. Similar controversies have arisen previously, such as the failed CryptoZoo project led by YouTuber Logan Paul.
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