Rise and Fall of Hawk Tuah: Cryptocurrency Community Reacts to Memecoin’s Abrupt Value Crash

Hawk Tuah Sued After Memecoin Pre-Sale Raises $2.8M Before 95% Value Drop

In a shocking turn of events, the cryptocurrency community is reeling after memecoin Hawk Tuah crashed 95% in value following its launch, wiping out millions in investor funds and leading to the disappearance of its creator from public view.

The token’s meteoric rise and subsequent collapse have raised serious concerns about insider trading, market manipulation, and potential securities law violations. The incident is also reminiscent of other celebrity-linked memecoins that failed spectacularly in 2024, including tokens associated with Andrew Tate, Jason Derulo, and Caitlyn Jenner.

According to court documents, Hawk Tuah’s pre-sale campaign raised a staggering $2.8 million before its value plummeted. This rapid decline has triggered immediate concerns about potential market manipulation, as major holders quickly sold their positions.

The lawsuit emphasizes how the project leveraged its creator’s internet fame to market HAWK as an investment opportunity. Many affected investors were fans of Welch’s content who were new to cryptocurrency trading. The marketing efforts portrayed token ownership as equivalent to holding shares in the project, further fueling speculation about insider trading and potential securities law violations.

The timing of Welch’s departure from public view, coinciding with the token’s collapse, has only added to the scrutiny surrounding the project. Court documents reveal that defendants promoted HAWK through pre-sale campaigns and discounted token offerings, despite claims of being an offshore entity. The team also allegedly made little effort to restrict token sales to US investors.

On-chain investigation platform Bubblemaps revealed concerning details about the token’s distribution. At launch, a staggering 96% of HAWK’s supply was concentrated in a small group of related wallets, raising questions about the project’s decentralization claims.

Source: blockonomi.com