The Cautionary Tale of the $Hawk: The Rise and Fall

There are several cautionary tales in crypto. Many crypto projects have risen, only to crash rapidly due to creator mistakes, or worse, because it was always a scam. This week, we’d like to discuss the rise and fall of the $Hawk token, as well as news updates about the lawsuit that has been filed against the creators.

Whether you’ve heard of $Hawk or not, keep reading to learn a little more about the way memecoins function and some of the reasons they are so popular despite the fact that they crash frequently.

What is $Hawk?

$Hawk is a memecoin built on the Binance Smart Chain under the BEP-20 token qualifications. Supposedly, the Hawk Token symbolizes freedom, but like most memecoins, we suspect it is nothing more than a simple picture and a temporary store of value. It is most closely related to Shiba Inu, which is a comparable project built on the Ethereum platform.

How Does $Hawk Work?

Hawk token is a memecoin, meaning its value directly increases and decreases based on the economic laws of supply and demand. As more people purchase the token, the value rises, as people sell, the value falls.

The $Hawk token was launched in June 2024, though the ICO wouldn’t occur until late into the fall. Upon release, the token quickly rose in value before plummeting just a few days later.

Who Created $Hawk?

Despite common belief, the $Hawk token was created by Clinton So, the CEO of the platform OverHere. Although Hailey Welch and Alex Larson Schultz appear to be publicly connected to the token—neither were creators and they were both paid to promote the token, both in cash and in a percentage of the tokens.

Hailey Welch was given 10% of the initial share of $Hawk tokens and, per her contract, is unable to sell for one year. We are unsure what percentage of tokens Alex Larson Schultz holds.

What Caused $Hawk to Crash?

$Hawk sadly crashed within hours after launch, and it was found after an investigation that this was due to several nodes purchasing large amounts of the token (one node alone bought nearly 20%) only to offload the investment a few hours later. The one node that was able to purchase 20% of the token was able to sell its holdings for a profit of nearly $1.3 million which is impressive when you consider this happened so soon after launch.

The damaging sales were performed by only a handful of wallets, and though the creator of the token, So, denies any involvement with these wallets (he states that they must be bot wallets), there is currently a lawsuit against So and Schultz over the topic.

The $Hawk Lawsuit

Currently, the lawsuit against the creators of $Hawk, So, and Schultz is still open and under investigation. The lawsuit names 15 plaintiffs who lost a collective $150,000 the day $Hawk launched and crashed. They allege that $Hawk was a rug pull scheme and that they were unfairly influenced to buy the tokens by Welch and, as a result, lost all of their money.

It is unclear whether or not the lawsuit will be successful, but we should point out that the $Hawk token was not registered with the SEC and was, therefore, not a licensed security in the United States. Not only that, but it is required by law to disclose certain information when advertising a cryptocurrency on social media. That being said, Hailey Welch is not specifically listed in the lawsuit, so we are unsure whether or not she will be fined for her involvement in the project if the lawsuit is successful.

Is $Hawk a Scam?

As we mentioned above, $Hawk launched to immediate popularity thanks to the social media following of Hailey Welch, only to plummet just a few hours later. This massive market movement caused many investors to lose thousands of dollars in minutes. As such, it was quickly assumed the $Hawk is a pump and dump scam.

But is it really a pump and dump scheme? We honestly can’t say for sure, but at this moment in time, it does appear that $Hawk is not a sound investment and could possibly be a scam—though we cannot say anything for certain.

Who is the Hawk Tuah Girl?

The term ‘Hawk Tuah Girl’ is Hailey Welch's online nickname. She is from Tennessee, and she got the name thanks to a viral interview during which she made a spitting sound in conjunction to mimicking oral sex. She is a social media influencer, though her reach has gone much further in recent months. She is also known for starting an animal charity, her podcast, and, most recently, her connection to the cryptocurrency industry.

What is the Lesson to Be Learned from $Hawk?

As indicated in the title of this article, there is a major lesson to learn from this incident. Most of the plaintiffs named in the $Hawk lawsuit have specified that they are first time investors in cryptocurrency, and though they lost $150,000 collectively, if you have been in the cryptocurrency trading industry for a long time, you know that this is practically nothing in the grand scheme of cryptocurrency scams.

That’s beside the point, however, but the bottom line is this—investing in cryptocurrency is always a risk, and that risk is even more prevalent when you invest in a new and unproven project, especially one that has been promoted on social media by a party who lacks the knowledge of how cryptocurrencies function.

Not only that, but we urge you never to purchase memecoins, as their value isn’t able to be predicted or maintained in the same way as other cryptocurrencies. There is almost never a reason to purchase a memecoin and there is even less of a reason to purchase a new memecoin.

Of course, we do not know the outcome of the lawsuit in the $Hawk situation and it is possible that everyone involved gets their money back. But in a lot of token crashes, this isn’t the case. It is far more likely that you make an investment only for the creators to vanish with all your money—whether they blame it on bots or not.

Overall, we never recommend investing in memecoins, and we definitely don’t recommend investing in tokens promoted by a social media influencer. Instead, we urge you to learn more about cryptocurrency before placing your first investment and to do so in a proven project like Bitcoin or Ethereum. And, as always, discuss any purchase you plan to make with someone who is also experienced with cryptocurrency that you trust.