Investors who bought the Hawk Tuah memecoin, named after social media personality Hailey Welch, are now suing those involved with its launch. The token's value plummeted by over 95% within a day of its December 4 release. Lawyers claim the defendants unlawfully promoted and sold the token without proper registration, using Welch's fame to boost its appeal.

Welch gained fame through a viral video and has since turned her popularity into merchandise and a podcast. The lawsuit targets Tuah The Moon Foundation, OverHere Ltd, its exec Clinton So, and promoter Alex Larson Schultz. It alleges they exploited Welch's fame and promises of future growth to create a speculative frenzy. Many investors, often first-timers, suffered significant losses.

The lawsuit, filed in a New York federal court, doesn't name Welch. It highlights that the memecoin was launched on a viral phrase, and investors trusted Welch's endorsement. Despite this, Welch's manager refused it was a cash grab, saying they planned free token distribution to fans.

The defendants will respond to the lawsuit, possibly seeking a summary judgment. If denied, the case may go to trial, where damages could be decided by a jury.

Memecoin Meltdown: Hawk Tuah Fans Sue Over Crashed Crypto

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