Investors are suing the team behind Haliey Welch’s HAWK crypto project in a lawsuit alleging that crypto-newbies enticed by her endorsement suffered significant damages when the token crashed. 

Newsweek reports that the lawsuit filed today claims “defendants offered and sold to the public without proper registration.” This, it says, resulted in the “unlawful promotion and sale of the Hawk Tuah cryptocurrency memecoin.”  

It also states that “many of the investors were first-time cryptocurrency participants drawn to the project through Welch’s involvement,” and that after the token crashed, it caused “substantial damages to investors who relied on Welch’s participation and the project’s stated road map.” 

Read more: Haliey Welch’s HAWK token team breaks silence to shift the blame

Defendants listed in the lawsuit include the Tuah The Moon Foundation, overHere Ltd. and its exec, Clinton So, and Alex Larson Schultz, a.k.a. “Doc Hollywood.” Welch isn’t named as a defendant. 

The suit claims they “leveraged Welch’s celebrity status and connections to enhance the Token’s credibility and appeal.” It also claims “aggressive” promos and growth promises were used to create a “speculative frenzy.”

Welch hasn’t posted anything on her social media channels since launching the token. Indeed, the last thing she posted — that she was going to bed — quickly became a meme.

Despite radio silence from Welch, overHere did address the controversy, claiming that most of the blame should be placed on Schultz. It did admit, however, that it should’ve been more diligent.

The lawsuit seeks a trial by jury and over $150,000 in damages.

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The team behind Haliey Welch’s controversial “Hawk Tuah” crypto project HAWK, has finally spoken out after 12 days of silence in the wake of the token’s collapse.

Welch herself has also been absent from her social channels since the token’s botched launch. The last thing she said was, “I’m going to bed, I’ll speak to y’all in the morning,” which spawned a series of memes joking that she’s still asleep. 

However, the team that launched the HAWK token, overHere, which had been silent since December 5, finally spoke yesterday in an attempt to distance itself from the mess. 

OverHere claims its role was “unofficial” and “uncontracted.” As such, it says it received no fees and made no profit from HAWK’s launch. Instead, it places much of the blame on “Doc Hollywood,” who apparently “controlled all token decisions, fees, treasury.”

Doc Hollywood was allegedly silent despite “market chaos” and “watered down” participation conditions, including shelving of a planned token lock-up. It was also allegedly his decision to implement the 15% fees and he apparently lied about overHere’s capacity in the project. 

As for overHere, it admitted that it should’ve spoken out sooner and that it trusted the wrong partners while spending too much time fixing other people’s mess. OverHere claims that Welch’s team needs to step up, Doc needs to step down, and a full treasury audit is needed. It said, “Without Haliey’s engagement, nothing changes.”

OverHere has, however, failed to address the purpose of a Cayman Islands foundation and British Virgin Islands business the team repeatedly referred to in an X Spaces.

Read more: Bit on that thang! Michael Saylor ‘orange pills’ the Hawk Tuah girl

According to Crypto Sleuth Coffeezilla, the team pre-sold millions of tokens to investors who then dumped their holdings when the token sale went live. There was also a problem with a crypto sniper and the team also implemented transaction fees of 15%.

At launch, the token hit a high of $0.000856 before plummeting in price. It’s now at $0.0000000000164, having decreased by 100% since its all-time high. 

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The United Kingdom’s Financial Conduct Authority (FCA) has issued a warning that Retardio, a grossly offensive Solana-based memecoin and NFT project, “is not authorised” by the regulator. 

Retardio responded by posting a meme that depicts Jeff Bezos in clown makeup. 

It appears that the token has no reason to exist except to allow a contingent of Solana-based cryptocurrency traders an asset on which to speculate.

Following the announcement from the FCA, the token’s price was buoyed, according to data from DexScreener. The total market capitalization for the project has again breached $100 million.

The FCA has been trying to focus more on crypto, asking today for industry feedback on its new discussion paper looking at regulations for the space. 

Read more: TikTok accused of operating as crypto exchange in the UK, report

Additionally, the FCA has grown its cryptocurrency-focused staff this year. Its number has now reportedly reached triple digits and its fastest-growing team is the the policy team. 

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Haliey Welch, the media executive behind the Talk Tuah podcast, launched a memecoin called $HAWK in collaboration with overHere. The token has attracted significant controversy as its early market capitalization of nearly $400 million has quickly plummeted to under $20 million. 

This has led a number of Welch’s fans to brand it a scam, and the project has faced accusations that the team has been selling the token — something overHere has publicly denied.

These accusations have often centered around the fact that Bubblemaps claimed 96% of the supply was in a single cluster.

Assuming overHere is telling the truth and the team intended to follow the “Hawkanomics” token distribution plan, it’s important to note that it seems less than half of the token supply would be allocated to the public. 

What real utility for $HAWK?

Besides the distribution, there are many other potential criticisms that can be levelled at this project, including potential problems with its marketing.

overHere has publicly advertised that along with Welch, it will be “creating real utility for memecoins” with this project.

However, the website for $HAWK, as well as the entirety of the available documentation, doesn’t describe anything resembling utility.

Indeed, the closest the website comes to describing this so-called “utility” is claiming that “hundreds of thousands of non-crypto users will be onboarded by $HAWK.” 

However, the project seems incredibly unlikely to ever achieve that goal. Furthermore, onboarding people is not prima facie “utility,” as utility requires the token to be able to be used.

Furthermore, despite claiming that the project will onboard “hundreds of thousands of non-crypto users” the Token Terms and Conditions additionally claim that, “TOKENS ARE ONLY INTENDED FOR THOSE PERSONS WHO ARE KNOWLEDGEABLE AND EXPERIENCED IN CRYPTOCURRENCIES, BLOCKCHAIN, AND RELATED TECHNOLOGIES.”

It is unclear how this token could be intended to onboard “non-crypto users” while also only being intended for people who are “knowledgeable and experienced in cryptocurrencies.”

Protos has reached out to overHere and Penthouse Life (Welch’s management) several times since Friday morning to get clarification on what “real utility” this offers. We have not received a response. 

What Cayman Islands foundation?

Following the token’s controversial launch, Welch and overHere took to an X Spaces to explain what happened.

Throughout this Spaces, the team repeatedly referenced a Cayman Islands foundation that was behind the token.

Oddly, the terms and conditions for $HAWK reference “Tuah the Moon Inc.” which appears to be a British Virgin Islands business, not a foundation. It’s not clear what role the frequently mentioned foundation is fulfilling, or even what its identity is. 

Read more: US congressman Mike Collins goes from altcoins to memecoins

Strangely, the X Spaces is no longer publicly available.

Protos has reached out to overHere and Penthouse Life for clarification on why the Spaces was deleted and the nature of this Cayman Islands foundation and British Virgin Islands business. However, once again, at time of publication, we had received no response. 

So what?

Some users online have been quick to defend Welch, claiming she wasn’t knowledgeable enough about cryptocurrency to be held responsible for these problems. Strangely, this defense would mean she’s not the intended audience for her own token, based on her own token’s terms. 

Others have tried to take advantage of these stumbles to launch their own competing memecoins. Many of these centered around jokes involving Welch’s famous meme, or suggesting she was likely to face jail, prison, or at least a judge. 

Some have also been quick to suggest that “investors” in a token themed around a blowjob-based meme don’t deserve recourse in the spirit of caveat emptor.

Both overHere and Welch have been quiet since the Spaces concluded, not even willing to answer emails — at least when they come from us.

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Members of the Taliban have been “making good money” trading memecoins, specifically Shib and Dogecoin, according to a recently-released documentary film.

On Sunday, X user and documentary filmmaker “Arab” posted a snippet of a two-part film in which he spends seven days with the Taliban. In the 37-second clip, Arab sits in a room of (presumably) Taliban members and asks one particularly elderly man “do you like memecoins?”

At this point, another man interjects, telling Arab that “they don’t know about that.” However, he goes on to explain that he is familiar with crypto and opens up with more details about his trading strategies and preferred coins.

“I’ve done Shib and these things,” he says, adding, “I made some good money in Shib and with Doge.”

However, he then clarifies that he “lost it back.”

“Talibros trading memecoins,” laughs an excited Arab before the man chimes in again with “buying high, selling low. That was my thing.”

Read more: US congressman Mike Collins goes from altcoins to memecoins

Arab then jokes to the camera, “If you rug-pulled, just know, you took it from this man here. And me”

Other clips from the film feature the same man claiming that women “cannot rule because they have less brain,” revealing the “truth behind 9/11,” explaining why the Taliban banned music, and attempting to recruit Arab (he seems open to the idea).

In the comments under the clip, Arab posted, “Someone run up $SHARIA coin,” before quickly following up with, “GUYS IM TROLLING DONT BUY $SHARIA COIN. I DO NOT CONDONE THIS.”

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US Congressman Mike Collins has gone from altcoins to memecoins by investing up to $30,000 in Ski Mask Dog (SKI), which rocketed 116% in price after he acknowledged the purchase on X.

Mike Collins published his Periodic Transaction Report on Monday, revealing he made two purchases with the masked dog memecoin on December 1 and December 2. It’s unclear how much he bought but each purchase was between $1 and $15,000. 

The Unusual Whales X account reported on his purchases yesterday. The Republican representative then responded to its post with a picture of Pepe the Frog wearing shades. The price of SKI subsequently rose 116% over 24 hours, reaching a price of $0.2281. 

Read more: US congressman Mike Collins loves day trading altcoins, report

Collins also bought up to $15,000 of the altcoin Aerodrome (AERO). The US Congressman previously bought up to $50,000 worth of AERO on July 6 before selling and buying AERO again on August 5.

Aerodrome, however, saw very little in price change; it has decreased 0.5% in the last 24 hours, reaching a price of $1.63.

Collins has also bought the altcoin Velodrome and made two ether purchases totaling $65,000 earlier this year. 

Under the STOCK Act, Members of Congress must report investment purchases, sales, or exchanges over $1,000.

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In recent months, a total of $3.5 million worth of SOL has been raised by Pump Fun-based memecoins after being promoted via hacked X and Instagram accounts.

Scammers targeted accounts belonging to businesses and celebrities such as McDonald’s, Usher, and Wiz Khalifa. They used their wide reach to tease a token’s ticker or contract address, or simply link to a token’s Pump Fun page.

Blockchain investigator ZachXBT has traced the initial funding of each of the 16 tokens on the Solana-based launchpad, connecting each incident to funds raised from the preceding scams.

Read more: ‘Thanks for the 20 bandos!’ Teen behind QUANT rug pull misses out on $4M profit

The incidents were linked either by direct funding between associated addresses, or the fact that proceeds were transferred into shared crypto casino deposit addresses.

The affected social media accounts were wide-ranging and also include Breaking Bad actor Dean Norris, Enoshima Aquarium in Japan, Andy Ayrey (creator of AI crypto bot ‘Truth Terminal’), and the owner of Kabosu, the Shiba Inu behind the original ‘Doge’ meme and its associated crypto.

The results of the scams were also varied, with the most lucrative target being Andy Ayrey at a total of $2.2 million across six tokens launched. The McDonald’s GRIMACE token netted over $690,000, and proceeds from the USHER token totaled 4,868 SOL worth approximately $650,000 at the time, according to data from CoinMarketCap.

Once an account is hacked, it can be difficult to regain full control; in the Andy Ayrey case, the X account was compromised for a number of days. Blockchain security expert Pablo Sabbatellla detailed the frustrations involved in trying to recover accounts and dealing with X’s “terrible security UX.”

Teasing a “Part 2” of the investigation, ZachXBT has also promised to “expose multiple threat actors linked to the 9+ compromises,” on top of the “on-chain connections.”

Past investigations have led to the arrest of scammers in both France and the US.

Read more: How to stay safe on-chain: Three crypto users lose $876K within hours

All fun and games?

Pump Fun has recently devolved into a hive of extreme attention-grabbing behavior, with token creators resorting to increasingly shocking lengths to stand out amongst the approximately 50,000 tokens being launched daily.

The race to the bottom, which reportedly included creators threatening murder, suicide, and other extreme acts, culminated in the platform removing its live-streaming feature on Monday.

Read more: Pump Fun livestreams spark backlash from disgusted traders

In a ‘moderation message’ posted directly to the Pump Fun website, the team informed users that the feature would be paused “for an indefinite time period until the moderation infrastructure is ready to deal with the heightened levels of activity.”

Since its launch in January, Pump Fun has made over a quarter of a billion dollars in fees across almost four million tokens created on the platform, according to a dashboard on Dune Analytics.

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According to a new analysis of 1,500 memecoin promotions, two-thirds are now worthless and another 10% have crashed over 90%. Not only that, despite cherry-picked testimonials and celebrations of outsized gains, researchers found that only 1% of these coins ever rally 10X after their initial endorsement.

This disappointing performance is particularly noteworthy given the otherwise bullish crypto market that has added over $1 trillion in market capitalization in the past 30 days.

The research from Coinwire corroborates analysis by Protos which revealed that 99.99% of the 1.7 million meme coins launched on Solana’s Pump Fun never sustained a market capitalization of even $1 million.

According to Coinwire’s analysis of 377 influencers with at least 10,000 followers on X, promoters with larger followings tended to achieve poorer results than those with smaller audiences. The more popular influencers convinced more people to view — and presumably buy — the worst cohort of a terrible class of investments.

However, the truth is that all promoters delivered dismal results that lay bare the reality behind dreamy advertisements about overnight success.

Read more: All bitcoin models destroyed: Stock-to-Flow, Power Law, Rainbow

Typically quiet losers on these schemes have voiced their complaints on social media.

Indeed, many have admitted to losing life savings and going into credit card debt through trading memecoins. Another admitted to losing $45,000 while others lost money buying coins based on recommendations from celebrities.

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A Thursday evening tweet of the Chill Guy meme by El Salvador’s President Nayib Bukele pumped the price of a Solana memecoin by 65% in 90 minutes.

While Bitcoiners interpreted the tweet as a reaction to bitcoin’s rally above $96,000, memecoin traders interpreted the tweet literally.

Although dozens of Chill Guy-named memecoins exist, the largest and most liquid version exists on Solana. Starting at a market capitalization of $300 million as of 9:09pm in El Salvador when Bukele tweeted, crypto traders immediately ran up the coin to a $500 million market cap.

As of publication time, the tweet has earned over 1.4 million views and the associated memecoin has generated over $350 million in 24-hour volume.

Bukele claims that El Salvador became a sovereign bitcoin investor on September 6, 2021. After years of acquisitions, the country now claims to possess 5,940 bitcoin worth over $550 million. With bitcoin at all-time highs, Salvadoran purchases have accreted hundreds of millions of dollars to the country’s treasury.

Historically, Bukele has only spoken publicly about bitcoin and tether, suggesting that his pumping of this small memecoin might have been inadvertent.

Read more: Solana pre-sale meme coin founders abandon their crashing projects

Phillip Banks created the Just A Chill Guy meme in October 2023 and it spread virally on social media, especially TikTok where it enjoys a phrasal template. Chill Guy’s nonchalant smirk, casual attire, and serenity portray an indifferent equanimity amid a variety of otherwise stressful situations.

Earlier today, the meme’s creator Phillip Banks threatened to issue takedown notices for assets or applications that used the character.

Speaking via X, Banks said, “Chill guy has been copyrighted. like, legally. I’ll be issuing takedowns on for-profit-related things over the next few days.”

He clarified, “Not like brand accounts using him as a trend, that’s kinda something I don’t really care about (I do just ask for credit. Or Xboxes), mainly unauthorized merchandise and shitcoins.”

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Litecoin, once described as the crypto silver to bitcoin’s gold, is now apparently self-identifying as a meme coin. The bold new approach has already seen it debut a new low-effort mascot, adopt a sassy tone on social media, and throw X-rated shade at its altcoin rivals.

The stunt appears to have been timed to coincide with bitcoin’s latest bull run that has inevitably carried various meme coins to new highs also.

Since November 13, Litecoin’s X account — which has traditionally focused on posting general promotional material and articles about its progress — has adopted a far more irreverent tone. So far, it’s called its followers “crypto beaches,” made a Uranus joke, and referred to fresh buyers purchasing Litecoin as “taking the L.”

Earlier today, the account also implied that Solana is an “extreme pussy.”

Read more: Marc Andreessen gave an AI agent $50,000 of bitcoin — it endorsed GOAT

As part of the meme coin rebrand, Litecoin has also adopted a hastily drawn stick man as its mascot. 

Since Litecoin’s rebrand, the price of LTC has increased from $72 on November 13 to $83 at press time. It will also be hoping that the publicity surrounding its change of direction goes some way to improving its image given that many were beginning to question the currency’s relevance.

Read more: Hamster Kombat loses 86% of its users but gains 3,720% in volume

Indeed, even Litecoin’s own X account joked about its less-than-stellar price action, posting, “BREAKING: $LTC RECLAIMS $84 FOR THE 10,000,000TH TIME IN THE PAST 3 YEARS.” 

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