image Haliey Welch—known online as “Hawk Tuah Girl” after her viral summer moment sharing risqué relationship advice—seemed unstoppable. She parlayed that fame into a podcast, launched an animal charity, and embraced her newfound internet stardom. But like many influencers before her, Welch...
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Hawk Tuah Girl’s Crypto Coin Fiasco: Investors Cry Foul After Millions Vanish Overnight
@mitch.social
12/7/2024, 1:38:39 PM
Haliey Welch—known online as “Hawk Tuah Girl” after her viral summer moment sharing risqué relationship advice—seemed unstoppable. She parlayed that fame into a podcast, launched an animal charity, and embraced her newfound internet stardom. But like many influencers before her, Welch took a hard left turn into the world of cryptocurrency, and, well… it didn’t go as planned.
Her entry into the crypto space, $HAWK, went live this Wednesday on the Solana blockchain with all the enthusiasm of a blockbuster premiere. Welch’s team promised the coin was legit—fully compliant with securities laws and definitely not just a grab for cash. But by Thursday, almost nobody believed that. What started with a meteoric 900% jump in value came crashing down by 95%, leaving retail investors staring at empty wallets and an industry buzzing with accusations.
From Meme Queen to Crypto Crash
Let’s rewind. Welch has a soft spot for memes and Musk—her Twitter (sorry, X) feed is practically a shrine to the Tesla Cybertruck and Dogecoin. So, when her advisors pitched a meme-based crypto coin to capitalize on her internet persona, it seemed like a natural fit. And for a brief, glittering moment, it was. $HAWK’s initial trading frenzy ballooned its market cap to nearly half a billion dollars.
Then came the freefall. In hours, the coin’s value collapsed, dragging retail investors down with it. The crypto community, quick to spot foul play, began dissecting what went wrong. Allegations of insider trading flew: one wallet reportedly flipped 17.5% of the token supply for $1.3 million in under 90 minutes. Blockchain analysts at Bubblemaps uncovered troubling data—96% of $HAWK was concentrated in a tight cluster of related wallets. Was this a coordinated pump-and-dump? The signs weren’t great.
The Blame Game Goes Live
On Wednesday night, Welch’s team held an audio session on X Spaces to “clear the air.” Spoiler alert: they didn’t. Instead, the hour-long discussion became a circus of vague excuses and awkward silences. Welch, uncharacteristically subdued, ceded the mic to her crypto partners—platform overHere and a mysterious figure known as “Doc Hollywood.” Neither did much to quell investor outrage.
Things took a sharper turn when YouTuber Coffeezilla, known for his relentless investigations into crypto scams, joined the chat. He didn’t hold back: “This is one of the most miserable, horrible launches I’ve ever seen.” Welch, clearly unfamiliar with his reputation, shot back, “Okay, then why the fukk are you on?” Not exactly damage control. Coffeezilla pressed further, asking about nearly $2 million in transaction fees tied to $HAWK trades. Hollywood vaguely pointed to a Cayman Islands foundation but wouldn’t elaborate. Promises of evidence followed, but as of Thursday? Nothing.
“Mismanaged” Doesn’t Quite Cover It
Another guest, YouTuber FaZe Banks, didn’t mince words. He advised Welch to fire her entire crypto team, calling $HAWK a prime example of influencers diving headfirst into a complex space without doing their homework. Welch didn’t respond—20 minutes later, she simply announced, “Anywho, I’m gonna go to bed,” abruptly ending the call. (A pro move? Not so much.)
Meanwhile, Coffeezilla hosted his own Spaces session to dissect the chaos further. His conclusion? It’s not seasoned crypto investors who suffer in these scenarios; it’s newcomers—fans who trust influencers like Welch to guide them wisely. “The saddest part,” he said, “is targeting regular people who don’t know better.”
What Now for Welch?
By Thursday evening, Coffeezilla released a damning video with receipts: screenshots of text messages revealing Welch had pocketed a $125,000 advance for marketing $HAWK, with a promised 50% cut of net proceeds after expenses. Her lawyer chimed in defensively, insisting, “She truly didn’t intend to fleece fans.” Maybe. But as Coffeezilla put it, “She saw dollar signs and didn’t ask enough questions.” Here’s a link to his video. It’s good.
Welch has stayed quiet since Wednesday, deleting the recorded X Spaces session from her account (though, of course, it lives on YouTube). That hasn’t stopped the internet from piling on. Her podcast tagline—“Talk Tuah”—has been weaponized into quips like, “She’ll be talking tuah judge soon.” Adding insult to injury, a satirical “revenge coin” called $TUAH (as in “straight tuah prison”) has emerged, driven by memes of Welch in jail. Its goal? To surpass $HAWK’s market cap. Amazingly, it just might succeed.
So, what’s next for Welch?
As a lawyer and taking into consideration rules, regulations and laws relating to cryptocurrency, Web3, business liability, and SEC rules and regulations, the above situation involving Haliey Welch’s cryptocurrency $HAWK raises multiple legal issues that could lead to significant consequences. Before we go any further, please see this following:
DISCLAIMER: This communication does not provide legal, financial, tax or investment advice. Always do your own due diligence and consult with an experienced professional in your state, region or country.
Just to clarify, I’m not accusing anyone of wrongdoing or illegal activity. I’m simply sharing my thoughts on a breaking news story that’s got everyone in the space buzzing.
OK, now that that's out of the way, let’s break it down in detail:
- Possible Legal Actions
a. SEC Enforcement Actions
The Securities and Exchange Commission (SEC) may investigate $HAWK for violations of securities laws. Despite Welch’s team claiming the coin was compliant, the following factors suggest otherwise:
• Potential Classification as a Security: Under the Howey Test, a digital asset is likely a security if it involves:
- An investment of money,
- In a common enterprise,
- With an expectation of profit,
- Solely from the efforts of others.
Given the promotional nature of $HAWK and the promises made to investors, the coin might meet these criteria. If so, it should have been registered with the SEC, and the failure to do so could trigger enforcement actions, fines, and penalties.
• Pump-and-Dump Allegations: Evidence of insiders offloading significant amounts of tokens during the price surge suggests market manipulation. The SEC takes a dim view of such practices, as they harm retail investors and undermine market integrity.
b. Class-Action Lawsuits
Investors who suffered financial losses might band together to file a class-action lawsuit against Welch, her team, and the associated entities. Claims could include:
• Fraudulent Misrepresentation: Welch’s marketing materials and statements may have misled investors about the nature, purpose, and risks of $HAWK.
• Negligence: Welch’s failure to conduct adequate due diligence or understand the project’s risks could be grounds for liability.
• Unjust Enrichment: If Welch and her team profited disproportionately while retail investors lost money, they could face claims seeking to recover those gains.
c. Individual Investor Lawsuits
Retail investors who incurred substantial losses might pursue individual lawsuits. Such claims are more likely if these investors can demonstrate reliance on Welch’s endorsements or specific assurances that the coin was safe.
d. Regulatory Investigations
Other regulatory bodies, such as the Commodity Futures Trading Commission (CFTC) or the Department of Justice (DOJ), might get involved, particularly if there’s evidence of:
• Money Laundering: The concentration of $HAWK tokens in a few wallets could raise questions about the movement of funds.
• Tax Evasion: If Welch or her team failed to report proceeds accurately, this could lead to IRS scrutiny.
• Consumer Protection Violations: State and federal consumer protection agencies might investigate deceptive advertising or unfair business practices.
e. Criminal Prosecution
If authorities determine that Welch or her team intentionally orchestrated a fraud (e.g., a rug pull), criminal charges could be filed. Potential charges include:
• Wire Fraud: Using electronic communications to execute a fraudulent scheme.
• Securities Fraud: Misleading investors about a security’s value or purpose.
- What Will Likely Happen and Why
Immediate Consequences
• SEC Inquiry: The SEC will almost certainly investigate. Pump-and-dump schemes are a high enforcement priority, particularly when retail investors are involved.
• Investor Complaints: A class-action lawsuit is likely, as plaintiffs’ attorneys are adept at pursuing high-profile cases involving celebrities and financial harm.
Medium-Term Developments
• Settlements: Welch and her team may opt to settle civil claims out of court to avoid prolonged litigation. Settlements with the SEC are also common and often include fines, disgorgement of profits, and bans from engaging in certain financial activities.
• Reputational Damage: Welch’s public persona will likely take a severe hit, making future endorsements or projects harder to pursue. Public backlash often discourages other influencers from venturing into crypto.
Long-Term Ramifications
• Regulatory Precedents: Cases like this often lead to stricter regulations or increased oversight in the crypto space, particularly concerning influencer endorsements.
• Market Impact: The failure of $HAWK could deter retail investors from engaging with crypto projects, particularly meme coins, and increase skepticism toward influencer-driven financial products.
Why Some Actions Might Not Succeed
Challenges in Proving Intent
For criminal charges like fraud, prosecutors must prove intent beyond a reasonable doubt. Welch could argue that she relied on her advisors and lacked malicious intent, which might shield her from criminal liability.
Investor Knowledge
Sophisticated investors often understand the risks of cryptocurrency and meme coins. Defendants might argue that $HAWK buyers knew—or should have known—the speculative nature of such investments.
Jurisdictional Issues
Cryptocurrencies often involve offshore entities, making enforcement and recovery of funds more complicated. The Cayman Islands foundation managing $HAWK proceeds could complicate regulatory and legal actions.
Final Thoughts
This case exemplifies the intersection of hype, financial speculation, and inadequate oversight. I believe Welch and her team will face significant legal and regulatory fallout, primarily due to:
- The apparent insider trading and concentration of tokens.
- The misleading marketing and failure to comply with securities laws.
If handled poorly, this situation could lead to devastating consequences for Welch’s career and finances. However, taking accountability, cooperating with regulators, and compensating harmed investors could mitigate long-term damage.
What’s clear is this: $HAWK is yet another cautionary tale in an industry where due diligence often takes a backseat to viral fame. It’s a reminder that the SEC—and the law—are catching up to crypto’s wild west.