The launch of Hawk Tuah, a memecoin backed by influencer Hailey Welch, has caused a massive stir across social media after the token saw an enormous initial spike in value followed by a sharp decline. Allegations of insider trading and the involvement of “snipers”—individuals or groups that rapidly purchase large amounts of a token’s supply at launch—have dominated the conversation around the launch.
Welch, however, has denied any involvement in insider sales, asserting that neither her team nor any associated entities were responsible for such actions. In a December 5th post on X (formerly Twitter), she clarified that the launch was executed through the decentralized liquidity protocol Meteora, aimed at preventing sniping and other unfair trading practices. According to Welch, no key opinion leaders (KOLs) received free tokens, and her team did not sell any of the token supply.
Despite these claims, the launch has raised concerns among the broader crypto community. Hawk Tuah (HAWK) launched at 10:00 pm UTC on December 4 and quickly surged in value, reaching a peak market capitalization of $490 million. However, the excitement was short-lived, and within hours, the token saw a dramatic collapse. By the time of publication, the coin’s market valuation had dropped by 91%, falling to $41.7 million. This quick reversal has led to widespread criticism, as many users feel that the launch was manipulated by insiders and snipers to benefit from the initial surge in price.
On-chain data provided by platforms such as DexScreener and Bubblemaps revealed that between 80% to 90% of the HAWK token’s supply was controlled by a combination of insider wallets and snipers during the launch. These snipers, who act fast to purchase a large portion of a token’s supply when it goes live, often resell the assets for significant profits shortly afterward. For instance, one wallet managed to acquire 17.5% of the HAWK supply seconds after launch by spending 4,195 Wrapped Solana (WSOL), equivalent to about $993,000. Within an hour and a half, this wallet sold off 135.8 million HAWK tokens, netting a profit of $1.3 million.
Despite Welch’s statements defending the launch process, the controversy intensified with additional user reports on X. One user claimed to have lost $43,000 after purchasing HAWK tokens during the initial surge. Other users shared stories of losing substantial amounts while attempting to capitalize on the memecoin’s initial hype. On-chain data also indicated that one investor swapped around $1.4 million worth of another memecoin, MOODENG, for HAWK tokens, only to lose over $1.3 million in the process as the price quickly tanked.
The backlash surrounding the HAWK token has raised serious legal concerns. Several individuals have reportedly filed complaints with the U.S. Securities and Exchange Commission (SEC), and some law firms have begun advertising their services to those who lost money in the aftermath of the launch. Burwick Law, a firm that specializes in securities litigation, issued a post on December 5 inviting anyone who lost funds during the Hawk Tuah launch to contact them and explore potential legal options.
This controversy comes at a time when regulators have been tightening their scrutiny of the cryptocurrency space, especially when it comes to unfair practices such as market manipulation and deceptive token launches. If the allegations against Welch and the Hawk Tuah team are proven, they could face serious consequences, including potential regulatory actions and lawsuits from investors who claim to have been harmed by the launch.
While Welch continues to defend the token’s launch and the safeguards her team put in place, it remains to be seen how the situation will unfold. As the controversy grows, both the legal and regulatory landscapes will likely continue to shape the future of the Hawk Tuah memecoin and its creators. For now, investors are left to watch as the situation develops and decide whether any legal recourse may be available to recover their losses.
