The launch of Haliey Welch’s Hawk Tuah (HAWK) memecoin has ignited intense backlash online after a dramatic price surge and subsequent crash within hours of its debut. The token’s controversial rollout involved accusations of insider trading and sniping, raising questions about transparency and fairness.

Rapid Rise and Fall

Launched on December 4 at 10:00 PM UTC, HAWK quickly peaked with a market cap of $490 million. However, within three hours, its value plummeted by 91%, dropping to $41.7 million, as reported by DexScreener.

Blockchain data from Bubblemaps and DexScreener revealed that 80%-90% of the token’s supply was controlled by insider wallets and snipers, who rapidly acquired significant amounts at launch. These entities are now at the center of controversy.

Welch Denies Allegations

In response to the uproar, Welch stated on December 5 that her team had not engaged in insider sales or distributed free tokens to influencers. She also emphasized efforts to mitigate sniping risks by deploying the token on Meteora, a decentralized liquidity protocol, and imposing high initial transaction fees.

Despite these precautions, Solscan data showed a wallet purchasing 17.5% of HAWK’s supply seconds after its launch for 4,195 Wrapped Solana (WSOL), valued at $993,000. Over the next 90 minutes, the wallet sold 135.8 million tokens for a $1.3 million profit.

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Investor Losses

Retail investors were hit hard by HAWK’s volatile performance. One user reported losing $43,000, while another swapped $1.4 million worth of MOODENG tokens into HAWK, suffering a $1.3 million loss.

Potential Legal Consequences

The fallout from HAWK’s launch has attracted the attention of regulators and legal experts. Observers speculate that Welch and her team could face regulatory scrutiny. Several users have reportedly filed complaints with the SEC, and law firms like Burwick Law are offering legal counsel to affected investors.

In a December 5 statement, Burwick Law encouraged those who suffered losses to contact them and explore their legal rights, signaling the possibility of formal investigations or lawsuits.