Hailey Welch Lawsuit: $HAWK Token Fraud Claims and SEC Probe

The Hailey Welch lawsuit is a federal securities class action in the U.S. District Court for the Eastern District of New York over the December 2024 launch and near-immediate collapse of the $HAWK cryptocurrency token. Welch, the internet personality known as the “Hawk Tuah Girl,” was not named when investors first sued in December 2024, but a magistrate judge granted plaintiffs’ motion to add her on December 17, 2025, along with her manager and her company 16 Minutes LLC.¹ The case, now consolidated as In Re $HAWK Token Securities Litigation, is active, with no rulings on the merits and no settlement reported as of mid-2026.²

What Happened With the $HAWK Token

The $HAWK token launched on the Solana blockchain on the evening of December 4, 2024. Within minutes, its market capitalization surged to roughly $490–$500 million, then crashed to under $60 million in about 20 minutes.³ By the next day, the token had lost more than 90% of its peak value.⁴

Blockchain analysts said clustered wallets captured roughly 97% of the token supply and dumped their holdings almost immediately.⁴⁵⁶ Welch and her team initially blamed the collapse on “snipers,” automated bots that trade at launch, and Welch posted on X that she and the coin’s creators had not sold their personal holdings.⁷ Crypto YouTuber Coffeezilla publicly accused Welch and her team of insider trading and called the rollout “one of the most miserable, horrible launches I’ve ever seen.”⁸

What the Lawsuit Claims

Seventeen investors filed the original complaint on December 19, 2024, captioned Albouni et al. v. Schultz et al. (Case No. 1:24-cv-08650).⁹ A related case, Rodriguez Mena v. Schultz (Case No. 1:24-cv-08965), was consolidated with it by Magistrate Judge James R. Cho on October 27, 2025.²

The core legal theory is that the $HAWK token was an “investment contract” under the Securities Act of 1933 and therefore a security that had to be registered with the SEC before being sold to the public. Plaintiffs allege violations of Sections 5 and 12(a)(1), which prohibit the offer and sale of unregistered securities.⁹¹⁰¹¹

Plaintiffs also allege the defendants tried to sidestep U.S. securities laws by setting up Tuah The Moon Foundation as an offshore Cayman Islands entity and restricting pre-sale purchases to non-U.S. persons, but that 83% of the tokens were marketed to the general public without meaningful restrictions on American buyers. The complaint cites a Twitter Space recording in which Clinton So allegedly called token holders “decentralized shareholders” and acknowledged the team had sought legal advice on “mitigat[ing] any considerations around potentially being deemed to have sold unregulated securities to Americans.”¹⁰

The original defendants are:

Alex Larson Schultz, a Los Angeles promoter also known as “Doc Hollywood,” who the complaint alleges controlled token decisions, fees, and the project treasury.¹²
overHere Limited, the entity that launched the memecoin.¹³
Clinton So, founder of overHere Limited.¹³
Tuah The Moon Foundation, the offshore entity described in the complaint as collecting funds from the token sale.¹³

How Welch Was Added to the Case

Plaintiffs’ counsel, Burwick Law, initially left Welch out of the suit, calling it a deliberate strategy meant to be the “most effective way to make its clients whole.”¹²¹⁴

The amended filing describes a “Meme Token Creation and Monetization Agreement” between Memetic Labs and 16 Minutes LLC dated July 18, 2024. Under it, Welch was to receive $125,000 upfront and $200,000 more upon reaching promotional milestones, for a total of $325,000. Memetic Labs was entitled to a 50% lifetime profit share tied to trading activity and was given full access to Welch’s X account to draft and publish posts in her voice.¹⁴

Plaintiffs characterize Welch not as a passive celebrity endorser but as “a critical component of a coordinated marketing funnel designed to draw in retail purchasers who trusted her.” They allege she promoted the token as a “transformational cultural token” with subscription benefits for her podcast, despite the token lacking the technical architecture to deliver those features, and that the launch was designed to crash within minutes so insiders could extract profits in a “rug pull.”¹

Welch’s Response and the SEC Investigation

Within a day of the original suit, Welch posted on X that she was “fully cooperating” with the attorneys representing affected investors and encouraged those who lost money to contact Burwick Law. “I take this situation extremely seriously,” she wrote. Her team described her involvement as a limited marketing engagement in which she received a “fixed fee” for lending her likeness, with no guarantee of additional earnings from the coin.¹⁵

Welch has said she did not personally profit from token trading. “I did not make a dime for the coin itself,” she said, adding that the marketing fee she received went toward crisis public relations and legal fees.¹⁶ She said she “trusted the wrong people” and that her X account had been managed by the partner company, which provided scripted lines for her promotional posts.⁸

Welch disclosed in May 2025 that the FBI had visited her grandmother’s home after the crash, questioned her, and examined her phone, and that the SEC later took over the investigation and also reviewed her phone.¹⁷ On March 27, 2025, her attorney James Sallah announced the SEC had closed its investigation of Welch “without making any findings against, or seeking any monetary sanctions from, Haliey,” and said that because no enforcement action was brought, there were “no restrictions on what she can do in regards to crypto or securities in the future.”¹⁸ The available reporting does not indicate whether the SEC issued a formal no-action letter.

The SEC closing its investigation does not end the civil case. That proceeding is a separate action brought by private investors, not by a regulator, and its claims and standards are independent of the agency’s decision.

Where the Case Stands Now

The consolidated case is assigned to Judge Ann Marie Donnelly and referred to Magistrate Judge James R. Cho in the Eastern District of New York.² On April 23, 2025, the court appointed Alexander Escobar as lead plaintiff. Escobar, a 21-year-old investor, bought roughly 22.5 million $HAWK tokens for about $25,850 and sold them for $11,873, losing nearly $14,000. His motion was unopposed, and the court noted that although he was an “untraditional lead plaintiff” given his age, his claims aligned with the nature of memecoin investments, and no institutional investors had come forward.¹⁹ Wolf Popper LLP and Burwick Law were appointed co-lead counsel the same day.²⁰

As of June 2026, the docket shows continued activity but no trial date or final discovery deadlines have been publicly listed. No rulings on the merits, no motions to dismiss, and no settlement have been reported.²

1
Yahoo Finance. Hawk Tuah Girl Added to Solana Memecoin Lawsuit
2
CourtListener. Albouni v. Schultz Docket
3
KATU. Hawk Tuah Girl Unveils Crypto Coin With It Crashing Shortly After Launch
4
DL News. Investors Angry Hawk Tuah Girl Haliey Welch Memecoin Crashes
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Defector. The Hawk Tuah Memecoin Rug Pull Is the Apotheosis of Bag Culture
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Good Money Guide. Hawk Tuah Girl’s HAWK Coin Is a Reminder of the Harsh Reality of Crypto Pump-Dump Scams
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NBC News. Hawk Tuah Girl Says She’s Cooperating With Lawyers in Suit Related to Crash of Meme Crypto
8
Forbes. Hawk Tuah Creator Haliey Welch Says FBI Knocked on Her Grandmother’s Door After Failed Crypto Launch
9
Wolf Popper LLP. Hawk Tuah Initial Complaint
10
ClassAction.org. Albouni et al. v. Schultz et al. Complaint
11
Wolf Popper LLP. Hawk Memecoin Investigation
12
Times of India. Hawk Tuah Girl Hailey Welch Sued for Memecoin Disaster
13
Bloomberg Tax. Hawk Tuah Memecoin Investors Sue Promoters Over US Registration
14
Burwick Law. Hawk Tuah Token Lawsuit — In Re $HAWK Token Securities Litigation
15
CoinDesk. Hailey Welch Fully Cooperating With Lawyers Suing Over Failed HAWK Crypto
16
Complex. Haliey Welch Says She’s Come Out With Nothing After Crypto Scandal
17
The Block. Hawk Tuah Girl Says FBI, SEC Cleared Her of Legal Wrongdoing in Memecoin Fiasco
18
TMZ. Haliey Welch Hawk Tuah Girl Meme Coin Investigation Over, SEC No Charges
19
Wolf Popper LLP. Lead Plaintiff Order
20
Wolf Popper LLP. Wolf Popper LLP and Burwick Law Appointed Co-Lead Counsel in Hawk Memecoin Litigation