Who's to Blame for the Hawk Tuah Memecoin Disaster?

Hailey "Hawk Tuah" Welch didn't establish her name through the most orthodox or reputable of ways, but her memecoin controversy has since overshadowed her initial "fame," at least in crypto circles.

But in an industry plagued with pump and dumps, fraud, and scams, all fuelled by hype, is Welch truly a rugpull mastermind or is the meme-celeb also a victim of a nefarious industry?

Her memecoin $HAWK, which launched on the Solana blockchain early this month, peaked at a market cap of $490 million before crashing 91% to $41.7 million within hours of its debut.

The token's behaviour, which has classic attributes of a typical pump-and-dump pattern, raised concerns about insider activity and predatory trading tactics. Its launch appeared to be marred by "snipers" and insider wallets, which reportedly controlled 80-90% of the supply.

Bubblemaps’ analysis highlighted a cluster of interconnected wallets holding a significant majority of the token’s supply at launch, which triggered accusations of manipulation and a lack of transparency.

Data from Solana block explorer Solscan revealed that one wallet sniped 17.5% of the $HAWK supply seconds after launch, investing 4,195 Wrapped Solana ($993,000 at the time) and netting a profit of $1.3 million within 90 minutes.

On the other end, one X user reported a loss of $43,000 by investing in the memecoin, while another incurred losses exceeding $1.3 million by swapping $MOODENG for $HAWK.

Anywhoo, I'm Gonna Go to Bed

Famed internet sleuth Coffeezilla, who described $HAWK as "one of the most miserable and horrible token launches [he's] ever seen," joined the token's Twitter spaces on 5 December. When confronted about "who made millions of dollars" from fees in the scheme, the project owners failed to adequately answer the question.

Towards the end of the stream, Welch signed off mid-conversation by saying, "Hey guys! I hate to interrupt you, Nick, but hello there. Anywhoo, I'm gonna go to bed and I'll see you guys tomorrow." This was the last time the public heard from Welch.

Doc Hollycrook

The team behind $HAWK, OverHere resurfaced online on 17 December, stating that its role was "unofficial" and "uncontracted" and received no fees nor profit from the launch.

Instead, OverHere places the blame on Doc Hollywood who "controlled all token decisions, fees, treasury."

"As community sentiment shifted, so did Doc Hollywood’s approach," OverHere claimed. "As desperation kicked in, participation conditions were progressively watered down. What started with plans for a lock-up eventually ended with none."

OverHere claimed it trusted the wrong partners, stayed too long to try to fix others' messes and admitted it should have spoken up sooner.

The firm also ended its long thread by tweeting Welch directly, stating "Ready when you are, @HalieyWelchX."

Law Tuah

If you felt a legal battle bubbling underneath all the a chatter, you were right. Legal firm Burwick Law has filed a lawsuit on behalf of investors against $HAWK creators.

Soon after the scandal erupted. Burwick Law posted on X urging HAWK buyers affected by the recent price drop to come forward and explore the possibility of legal action.

Two weeks later, the firm filed a lawsuit on behalf of 12 U.S.-based plaintiffs, who collectively allege losses exceeding $151,000.

“Haliey Welch may finally wake up in response to today’s lawsuit filed by investors against the HAWK Team, alleging they marketed and sold an unregistered security,” crypto-centric attorney Carlo D'Angelo, who is unaffiliated with this case, told Decrypt.

“[The] lawsuit is not at all surprising, given the amount of attention both the token launch and its immediate pump and crash have drawn.“This lawsuit highlights the risks associated with the marketing of alleged 'pump-and-dump' meme coins.” D'Angelo added.

“For celebrities and influencers, the lawsuit serves as a stark reminder that lending one’s name and brand to cryptocurrency projects carries significant legal and reputational risks.”

The complaint names Alex Larson Schultz, who has been identified as Doc Hollywood, OverHere Limited, Clinton So, and Tuah the Moon Foundation as the four defendants.

Split on That Thang

Welch might be the face of the "Hawk Tuah" phenomenon but it's clear that there were many parties involved in making the $HAWK token such a phenomenal failure. Doc Hollywood and OverHere seem to be the most culpable but listed defendants Clinton So and Tuah the Moon Foundation suggest that more names will be dragged through the mud.

As for Welch, ignorance of memecoin mechanics might be her truth but her lack of responsibility in lending out her brand to fraudsters could also land her in hot water. Sympathy for ignorance only goes so far.

The whole saga is yet another warning of memecoin dangers and that Web2 branding doesn't necessarily translate well to Web3 projects.