Market Capitalization Collapse: Lawsuit Brought Against Hawk Tuah Memecoin Team After $2.8 Million Pre-Sale Raises Questions on Investment Opportunities and Marketing Practices

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

In a shocking turn of events, the cryptocurrency market has been shaken once more by the drastic collapse and subsequent legal action against the Hawk Tuah memecoin. This memecoin project, promoted by internet personality Hailey Welch, had reached an astonishing market capitalization of $2.8 million during its pre-sale phase before plummeting in value by a staggering 95%.

The sudden and precipitous drop in value has raised red flags among investors and regulatory bodies alike. As a result, the project is now facing legal action, with a lawsuit brought against the team behind Hawk Tuah.

According to reports, the lawsuit alleges that the project leveraged Welch’s internet fame to market HAWK as an investment opportunity. The allegations suggest that many affected investors were fans of Welch’s content who were new to cryptocurrency trading and therefore more susceptible to the promises made by the memecoin project.

The legal action also claims that the defendants promoted HAWK through pre-sale campaigns and discounted token offerings, portraying token ownership as equivalent to holding shares in the project. This marketing effort has been criticized for being misleading and potentially fraudulent.

One of the most concerning aspects of this incident is the revelation that 96% of the total supply was concentrated in a small group of related wallets at launch. These findings raise questions about the project’s decentralization claims, which were touted as a key feature by the development team.

The lawsuit highlights how the project specifically targeted the American market despite claims of being an offshore entity. This detail could prove crucial as US securities laws typically apply when American investors are involved.

It is worth noting that this incident adds to a pattern of celebrity-linked memecoin failures in 2024, with similar tokens associated with Andrew Tate, Jason Derulo, and Caitlyn Jenner resulting in substantial losses for holders.

In the aftermath of the collapse, Hailey Welch has withdrawn from public view, ceasing all social media activities and podcast production. This sudden disappearance has only added to the scrutiny surrounding the project’s operations and motivations.

As more information becomes available regarding this incident, it will be important to monitor how regulators respond to these developments.

Source: blockonomi.com