Hours after its launch, the $HAWK Token, which is associated with Haliey Welch, lost 90% of its value, prompting investors to sue its creators on the grounds of improper registration and promotion.

Investors are suing the makers of a failed meme currency that was based on online celebrity Haliey Welch, alleging that it was improperly registered and improperly promoted. Within hours of its introduction, the token, known as the "$HAWK Token," lost almost 90% of its value, according to court filings filed Thursday.

Welch, a 22-year-old who gained notoriety on TikTok for her audacious remark in a widely shared video, was linked to the token. By starting a podcast called Talk Tuah and selling items, she made money off of her fame. Although Welch is not named in the case, she advertised the currency to her 2.6 million Instagram followers and podcast listeners.

The lawsuit targets influencer Alex Larson Schultz (also known as Doc Hollywood), overHere Ltd., its creator Clinton so, and Tuah the Moon Foundation. They allegedly used Welch's notoriety to promote the currency as a safe investment without registering it in accordance with US securities regulations.

When the currency was launched on December 4, its market capitalization jumped to $490 million, but within hours, it had fallen to less than $100 million. The project was valued at $16.69 million after a pre-sale garnered $2.8 million, but investors claim they lost more than $151,000 overall.

According to the complaint, the dealers sold 17% of the tokens to circumvent securities rules and created the Tuah Foundation as an offshore corporation the day following the coin's introduction. Nevertheless, they persisted in marketing the remaining 83% of the tokens in the United States without making sure that purchasers were located abroad.

The plaintiffs contend that by promising that token holders would essentially be stockholders, the scheme was obviously targeted at the US market. However, there was never any registration of the $HAWK token as a security.

OverHere Ltd denied wrongdoing, claiming transparency about their involvement in the project. Meanwhile, Welch has stayed silent on the controversy, with no social media updates or podcast episodes since the coin’s collapse.