From national to the much-anticipated meme coinage, “Hawk Tuah Girl” is now the subject of a legal battle.
The developers of the digital asset named after the viral social media meme are now facing a lawsuit filed in the US District Court for the Eastern District of New York.
At the center of the legal storm is the “$ HAWK” token, which rose in value immediately after its launch and briefly hit a market cap of $490 million on Wednesday before falling 91%, with a revised market cap of $41.7 million.
More than a dozen investors quickly filed a complaint, with Alex Larson Schulz, Overhere Limited, Clinton So, and the Tuah The Moon Foundation as defendants.
$HAWK Starts Strong, Then Crashes 91%
The complaint filed by investors of the Hawk Tuah Girl meme-inspired coin was a violation of existing federal securities laws.
Haliey Welch, a Tennessee woman who became a viral sensation, inspired the coin of the meme and was not included in the suit. Welch’s viral video has garnered attention and millions of followers on social media.
His popularity led him to create podcasts, on which he invited many high-profile guests, including Wiz Khalifa and Mark Cuban.
Welch’s claim to fame was the foundation of the cryptocurrency, $ HAWK, which was launched on the market last December 4, with an initial market cap of 16.69 million.
A few hours after its launch, the meme coin broke the market cap of $490 million. However, this surge was short-lived, as it fell 91 percent, to a market cap of $41.7 million the next day.
Total crypto market cap at $3.19 trillion on the 1D chart: TradingView.com
Hawk Tuah: Following the Meme Coin Template
Meme coins have emerged as a popular category within the cryptocurrency industry. They are defined by their connection to viral posts, internet jokes, and social engagement.
Another reason for the popularity of meme coins is their accessibility, which gives retail traders and early investors the opportunity to participate in the community.
According to reports, many $HAWK investors were the first crypto buyers inspired by the popularity of the Welch virus. The case showed that a significant drop in the token’s market value caused financial damage to investors.
A lawsuit filed in a New York court produced claims of insider trading and that some developers intentionally left the project after raising and profiting from the token’s price.
‘Hawk’ Token Unregistered Security?
Plaintiffs have argued that the token exhibits features of unregistered protection based on prior legal decisions and cases.
They added that the project’s developers used Welch’s popularity and social media engagement to market the token and create a unique brand.
The plaintiffs also claimed that the initial success of the token was based on Welch’s business skills and the lack of participation of investors.
Meanwhile, market analysts say that the fall of the USD HAWK and allegations of insider trading may undermine current and future crypto projects.
According to George Georgiades of Borderless Innovations Lab Inc., meme coins have raised some issues that the Securities and Exchange Commission has not addressed in the past.
Featured image from Tayfun Coskun/Anadolu; Kanawatth/Getty Images, chart from TradingView
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