Hailey Welch addresses crypto rug pull accusations amid lawsuit against Hawk Tuah meme coin

'Hawk Tuah' fame Hailey Welch has addressed accusations of involvement in a crypto "rug pull," following a lawsuit filed by investors of the $Hawk meme coin project. Welch, who gained fame through viral internet content, took to X on December 20 to issue a statement expressing her commitment to resolving the matter.

The controversy stems from the $Hawk cryptocurrency, which Welch announced in early December. As per Newsweek's December 20 report, the token lost over 95% of its value within 20 minutes on December 4, with a fall of $440 million in market value. Investors then alleged that the project was a "rug pull," where token owners mass-sold their holdings, causing the value to plummet.

A class action lawsuit was filed on December 19 against OverHere Ltd, the company that created the coin, and its executive Clinton So, as well as Alex Larson Schultz, a Los Angeles-based promoter. As per Newsweek, the investors' lawyers described the case as arising from the following:

"The unlawful promotion and sale of the Hawk Tuah cryptocurrency memecoin, known as the '$HAWK' token, which Defendants offered and sold to the public without proper registration."

The suit also names Tuah The Moon Foundation, the entity used to handle the proceeds from the token's sale. According to court filings, investors claim that Hailey Welch's involvement helped to create a false sense of credibility, which lured fans and others into investing in the project. The lawsuit highlights that these actions have led to significant financial losses for everyday investors.

Welch was named in the lawsuit for allegedly using her celebrity status to inflate the coin's value. A community note on one of her earlier tweets, from December 4, also claimed her team did sell their $Hawk tokens, despite Welch's denial in the said tweet.

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Hailey Welch addresses token collapse and legal actions to support affected investors

On December 20, Hailey Welch posted on X:

"I take this situation extremely seriously and want to address my fans, the investors who have been affected, and the broader community. 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."

Her statement included a link for affected investors to contact Burwick Law, one of the firms representing the plaintiffs in the case.

This was Welch's first public comment since the token's collapse. A spokesperson for Hailey Welch claimed she had no direct involvement in the project's creation or management, as per Dexerto on December 20. They stated that Welch was only paid an initial sponsorship fee and had "no control" over the subsequent events, adding that the coin's creators took advantage of her viral fame.

The lawsuit alleges that Hailey Welch's association with the project created a "speculative frenzy" among fans and investors. As per Newsweek, a representative of Burwick Law commented:

"Sadly, this is one of many memecoin cases where institutional greed has exploited celebrities and their influence to harm everyday people."

Meanwhile, critics have been vocal online, with many accusing the influencer of being complicit, despite her denials. One notable community note attached to Welch's December 4 tweet read:

"Hailey is lying and will likely have to 'talk tuah' judge about this."

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As per Dexerto, Welch plans to "keep pushing forward" with her podcast, Talk Tuah with Hailey Welch, after clearing her name in the crypto controversy.