Haliey faces backlash after HAWK memecoin dumps 90 percent

Social media was shaken by the launch of viral influencer Haliey Welch's Hawk Tuah memecoin, which surged momentarily before quickly plummeting after a controversial deployment that involved claims of insider wallets and snipers.

HAWK memecoin sparks controversy as price immediately crashes

At 10:00 p.m. UTC on December 4, the Hawk Tuak (HAWK) memecoin was launched, and it quickly surged to a peak market value of $490 million. According to DexScreener data, the token's price then started to drop, reaching a valuation of $41.7 million at the time of publication, a 91% decline in less than three hours.

HAWK was launched at $0.005492, pumped to $0.04916, and then crashed, according to DEXScreener data. Based on combined data from Bubblemaps and Dexscreener, between 80% and 90% of HAWK's supply at launch was controlled by a combination of insider wallets and snipers, which are organizations that quickly purchase large quantities of a token's supply. Welch has denied any insider dealings or sales on behalf of her team or any affiliated entities.

Welch's official account stated in a post to X on December 5 that no tokens had been sold by the team and that no major opinion leaders had received free coins. The post further explained that the token was launched on Meteora, a decentralized liquidity protocol to lower the risk of sniping.

Haliey Welch wrote in a post on X that the “team hasn’t sold one token, and not 1 KOL was given 1 free token,” she said. “We tried to stop snipers as best we could through high fees in the start of the launch on Meteora. Fees have now been dropped.

Potential involvement with insider wallets

However, one wallet was able to snipe HAWK seconds after launch, buying 17.5% of the memecoin's supply for 4,195 Wrapped Solana (WSOL), which was worth $993,000 at the time, according to data from Solana block explorer Solscanner.

The wallet sold 135.8 million HAWK tokens over the course of the following hour and 30 minutes, making $1.3 million in profit. As per the on-chain data referenced by multiple X users, an investor lost slightly more than $1.3 million when they converted roughly $1.4 million worth of MOODENG, another memecoin, into the HAWK token.

HAWK memecoin could face legal consequences

There were also a handful of comments on Hailey Welch's social media posts about her possible connection to insider wallets. Several of her posts on X were also criticized by the community, which stated that since the launch, they have been selling slowly and that ten linked wallets hold 96% of the HAWK supply.

i really lost $43k apeing in “hawk tuah” coin pic.twitter.com/9j4frI37p8

— lynk (@lynk0x) December 5, 2024

In addition to the controversy surrounding the token's deployment, some analysts predicted that Welch and her group might face legal backlash as a result of the launch. Law firms have started marketing their services to people who lost money on the memecoin, and a number of users on X have reportedly complained to the U.S. Securities and Exchange Commission (SEC) about it. Burwick Law asked anyone who lost money on the memecoin to get in touch with them and find out about their legal rights in a post on X on December 5.

Shiba Inu leader addresses Hawk Tuah memecoin controversy

Following its disastrous launch, Shiba Inu lead developer Shytoshi Kusama has publicly addressed the trending controversy surrounding the HAWK meme coin. Kusama disclosed that he was contacted months ago by the Hawk Tuah team to serve as an influencer or Key Opinion Leader (KOL) for the project. He turned down the offer, though, saying he had more pressing matters to do than the HAWK launch.

Days before the launch, the Hawk Tuah team contacted him again through a mutual contact, despite his rejection. They promised to give the Shiba Inu community a $60,000 airdrop of millions of HAWK tokens. But Kusama was not impressed. In the meantime, he admitted that the airdrop would still take place even if he didn't participate because SHIB is decentralized. To ensure openness, Kusama allowed a retweet from Shiba Inu's primary account, but he reaffirmed that Shiba Inu and Hawk Tuah did not have a formal partnership or agreement.

Following the controversy, the HAWK team suggested that Kusama airdrop tokens, distributing them among 3,000 wallets. Kusama categorically denied this, saying, "I don't work for you." You work for the army. He emphasized that the team had to adhere to the correct rules and procedures if they wished to engage with the SHIB community. In the end, Kusama asked the SHIB Army to make the decision, asking the community to either burn the airdrop or ignore it.

According to analysts, the token's pattern was typical: it pumped rapidly, then crashed spectacularly, losing about 90% of its "value." A pump-and-dump scheme by insiders is often indicated by this, but Welch strongly denied any wrongdoing and blamed "snipers" for the crash.

At the time of writing, according to CoinMarketCap, Hawk Tuah is currently trading at $0.055149 and decreased by 66.05% in the past 24 hours.

Disclaimer

This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.