A class action lawsuit has been filed against several cryptocurrency promoters accused of unlawfully promoting and selling a memecoin— a type of cryptocurrency that gains popularity through internet memes or social media trends—resulting in significant financial losses for investors.
On December 20, 2024, Carlos Rodriguez Mena filed the complaint in the U.S. District Court for the Eastern District of New York against Alex Larson Schultz, overHere Limited, Clinton So, and Tuah The Moon Foundation.
The lawsuit alleges the defendants violated federal securities laws by selling unregistered securities in the form of $HAWK tokens.
The complaint outlines how the defendants allegedly leveraged social media influence to promote $HAWK tokens without proper registration.
Hailey Welch, known as the "Hawk Tuah Girl," played a central role due to her large social media following and viral fame. Her involvement was used to generate hype around the token, which launched on the Solana blockchain with promises of bridging mainstream culture with cryptocurrency.
Although the token's market capitalization soared from $16.69 million to $491 million within hours, its value later plummeted by more than 90%, leaving many investors with significant losses.
Rodriguez Mena argues that the $HAWK tokens were sold as securities without the necessary registration under U.S. law. The lawsuit also claims that the defendants created an expectation of profits through Welch's promotional efforts and failed to file a registration statement with the SEC.
Statements made during promotions and online discussions suggested that token holders would profit from Welch's influence and project management.
The plaintiff is seeking various forms of relief, including damages for the economic losses suffered by investors, disgorgement of unjust enrichment obtained by the defendants, rescissory damages, attorney’s fees, and other related costs.
The case highlights concerns over regulatory compliance in cryptocurrency offerings and investor protection.
Rodriguez Mena is represented by Chet B. Waldman of Wolf Popper LLP and Max Burwick of Burwick Law PLLC. The case is under Case ID No. 24-cv-08695.