Investors have reportedly sued the team behind the Hawk Tuah meme coin crypto project after an alleged rug pull caused them to lose money.
In early December, Hawk Tuah girl Haliey Welch launched the $Hawk crypto token, prompting fans worldwide to invest in the project.
Shortly after launch, however, claims that she and the team behind the meme coin rug-pulled the project surfaced on social media after investors began to rapidly lose money.
The launch quickly gained the attention of YouTube crypto investigator Coffeezilla, who called it “one of the most miserable, horrible launches” he had ever seen.
He added: “You guys generated over $1M in fees while y’all fans got rug-pulled. There were snipers but there was also insider trading directly linked to y’all creator account.”
On Thursday, December 19, Newsweek reported that investors have filed a lawsuit against the people behind the project.
Hawk Tuah meme coin project sued by investors
According to the report, the lawsuit “arises from the unlawful promotion and sale of the Hawk Tuah cryptocurrency meme coin, known as the “$HAWK” token (the “Token” or “$HAWK”), which Defendants offered and sold to the public without proper registration.”
Named in the lawsuit is the company behind the coin, Overhere Ltd, its executive Clinton So, and its promoter Alex Larson Schultz. Notably, Haliey Welch herself is not directly named in the lawsuit.
Attorneys said in the filing that the project created a “speculative frenzy that caused the Token’s market value to spike shortly after launch” which caused it to reach “a significant market capitalization.”
“Defendants leveraged Welch’s celebrity status and connections to enhance the Token’s credibility and appeal, including discussing the $HAWK project during Welch’s podcasts featuring notable guests,” it reads.
“Many of the investors were first-time cryptocurrency participants drawn to the project through Welch’s involvement. The rapid decline in the Token’s value caused substantial damages to investors who relied on Welch’s participation and the project’s stated road map.”
This isn’t the first crypto project to spark backlash across social media. Back in December 2022, Coffeezilla shared a three-part series about Logan Paul’s failed CryptoZoo project – prompting the YouTuber turned WWE star to launch an NFT buyback program to help those who invested recoup some of the lost money.