Hawk Tuah Girl Haliey Welch Cleared by SEC After Memecoin Crash Controversy

Haliey Welch, widely recognized as the "Hawk Tuah" girl following her viral street interview in 2024, has been in the spotlight again after the U.S. Securities and Exchange Commission (SEC) closed its investigation into her cryptocurrency venture.

The $HAWK memecoin, launched on the back of Welch's internet fame, made headlines when it plummeted 95% in value just hours after its debut, dropping from a market cap of $600 million to $59.78 million. This dramatic crash, which resulted in $151,000 in investor losses, sparked significant backlash and legal scrutiny, including a class-action lawsuit against Welch's team for alleged insider trading and deceptive promotional practices. However, the SEC's recent decision not to pursue charges or monetary sanctions against Welch marks a turning point in the saga.

The $HAWK token, inspired by Welch's viral moment, initially soared to a market cap of $490 million, fueled by the speculative frenzy often associated with celebrity-backed memecoins. Yet, the rapid decline left investors reeling, and the fallout led to a lawsuit filed in the U.S. District Court in New York.

The suit targeted overHere Ltd., its founder Clinton So, promoter Alex Larson Schultz, and the Tuah The Moon Foundation, accusing them of exploiting Welch’s popularity to market the token without proper registration. Welch herself was not named as a defendant, and she has consistently maintained that she did not play an active role in the coin's rollout, even cooperating with legal teams to assist affected investors.

Legal and Market Implications for Memecoins

The SEC's decision to close the investigation without action contrasts with earlier concerns raised by crypto lawyers, who warned that the $HAWK token could be classified as a security, potentially exposing Welch to securities fraud allegations.

This outcome may signal a more lenient regulatory stance on memecoins, which often lack the utility and community engagement needed for long-term viability. Industry experts have noted that celebrity-backed tokens like $HAWK frequently experience an initial spike driven by social media buzz, only to crash once the hype fades, as seen with other memecoin fads in the past.