According to court records filed on Thursday, investors who cumulatively lost £120,676 ($151,000) in the HAWK meme coin, inspired by Haliey Welch's Hawk Tuah trend, filed a lawsuit in the first US District Court in New York against the crypto team and its business partners.
The lawsuit alleged that the Hawk Tuah team failed to register the meme coin in accordance with securities laws. The Cayman Island-based sellers and promoters misused 22-year-old Welch's newfound fame to deceitfully promote the cryptocurrency as a registered security.
Tuah The Moon Foundation, business partner and meme coin crypto launchpad overHere, its founder Clinton So, and HAWK team member Alexander Larson Shultz, popularly known as "Doc Hollywood," were named defendants in the lawsuit. Shultz reportedly has ties to Canadian entertainer Howie Mandel.
Haliey Welch was not named in the lawsuit. She did, however, finally break her silence. Via a post on X, she says: "I take this situation extremely seriously and want to address my fans, the investors who have been affected, and the broader community. I am fully cooperating with and am committed to assisting the legal team representing the individuals impacted, as well as to help uncover the truth, hold the responsible parties accountable, and resolve this matter."
I take this situation extremely seriously and want to address my fans, the investors who have been affected, and the broader community. I am fully cooperating with and am committed to assisting the legal team representing the individuals impacted, as well as to help uncover the…
— Haliey Welch (@HalieyWelchX) December 20, 2024
So Converted Tuah Foundation Into An Off-Shore Entity To Bypass Securities Laws
The HAWK meme coin reached a market cap of almost £392 million ($500 million) shortly after launch on 4th December before tanking by 95% within minutes, leading to significant investor losses in a short span.
The lawsuit highlighted that a token presale raised almost £2.24 million ($2.8 million) at a £13.35 million ($16.69 million) valuation before the launch.
Furthermore, one day after the chaotic HAWK rollout, overHere founder So converted the Tuah Foundation into an off-shore entity before selling 17% of the token supply through the foundation to several people while evading securities laws. The early investors immediately sold most of their holdings, destabilising the token's price.
However, HAWK coin sellers pushed ahead with promoting 83% of the remaining token supply without making any "serious attempt" to inform those buying the crypto that the tokens were actually outside the US. "The project clearly was intended to take advantage of the American market," according to the lawsuit.
By So "linking the success of the social media influencer like Welch, he literally said that the token holders would essentially be shareholders," the investors noted. "Despite these clear indications of its status as a security, the HAWK Token was not registered by the Defendants."
"We have been extremely transparent about the limited scope and extent of our involvement in the Hawk Tuah token project," an overHere spokesperson told Bloomberg. "We are confident that we have done nothing wrong."
So's Company Launches A Scathing Attack on Shultz
So's overHere in a 17th December X post, formerly Twitter, shifted the blame to Shultz for the crypto chaos. The company said it didn't partake in any wrongdoing while claiming that Doc Hollywood controlled all token and fee decisions, ignored calls for transparency, and paid no trading fees to the company.
OverHere explained that it worked on the HAWK project for free without any official contract and how Doc's silence cost the emerging Hawk Tuah community's trust. The firm also refuted Doc's claims that it has 18 employees and clarified that it employs only four developers.
"This project needs Hailey's team to step up, Doc to step down [and a] full treasury audit," the company said. "Ready when you are Hailey Welch."
Doc Hollywood, 37, is a Los Angeles-based musician with a handful of successful hits. It remains unclear how he transitioned to crypto, teamed up with OverHere as a business partner, and apparently became a crypto mentor to Welch. Note that Shultz is reportedly Mandel's son-in-law. The Canadian actor previously posted Bitcoin and crypto videos on the "Howie Mandel Does Stuff" show.
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