What's New
Haliey Welch, the "Hawk Tuah Girl," is trying to portray herself as a victim in the crash of a cryptocurrency she promoted, a former federal prosecutor said.
Scott Armstrong was reacting to online comments by Welch, an internet personality, after the crash of the Hawk Tuah memecoin, which lost more than 95 percent of its value in a single day when it was launched on December 4. A memecoin is a type of cryptocurrency that is typically launched on the back of a popular internet meme or recurring joke.
Welsh is not named as a defendant in the case, which was filed on December 19 in federal court in the Eastern District of New York.
The investors are now suing the company Tuah The Moon Foundation, which was used to take in the money received from the sale of the memecoin. The investors are also suing the company's chief financial backers, listed as Hong Kong-based Overhere Ltd., its chief executive, Clinton So, and a Los Angeles-based online promoter, Alex Larson Schultz.
Newsweek sought email comment on Monday from Welch, So and Overhere Ltd.
Why It Matters
The case illustrates the volatile nature of memecoins.
The sales of the Hawk Tuah coins also illustrate the power the internet has to lift people from obscurity to international stardom.
Welch became famous after she was filmed by YouTube creators using the onomatopoeic phrase "hawk tuah" to describe a spitting action used in a sexual context. She has since transformed her newfound fame into a successful merchandise line and the podcast Tuah Talk, where she has interviewed musician Wiz Khalifa and Shark Talk investor Mark Cuban.
What To Know
Welch promoted the memecoin and said that, before she became involved, she believed that cryptocurrency was a scam.
On December 20, Welch reacted to the crash of the memecoin with several posts on social media.
She posted on X, formerly Twitter: "I take this situation extremely seriously and want to address my fans, the investors who have been affected, and the broader community."
Armstrong, now an attorney with New York-based McGovern Weems, told Newsweek that Welch is apparently "trying to cooperate and trying to cast herself as the victim."
The plaintiffs' attorneys, Wolf Popper LLP and Burwick Law, filed a complaint in which they claim that the defendants used Welch's celebrity status to create "a speculative frenzy that caused the [$HAWK] Token's market value to spike shortly after launch, reaching a significant market capitalization."
The lawyers claim in a press statement that the token "exhibits characteristics of an unregistered security, and was offered and sold to the public without proper registration with the SEC."
What People Are Saying
Welch posted on X, formerly Twitter: "I am fully cooperating with and am committed to assisting the legal team representing the individuals impacted, as well as to help uncover the truth, hold the responsible parties accountable, and resolve this matter."
Armstrong told Newsweek: "I've never seen anything like this before, so it's kind of uncharted territory," he said.
What Happens Next
Welch is seeking to avoid any lawsuits by siding with the plaintiffs and has advised people who lost money to contact the plaintiffs' lawyers.
The defendants will have an opportunity to file a reply to the lawsuit and seek summary judgment in their favor. If that does not succeed, the case will move to pre-trial motions and disclosure.
English (US) ·