Haliey Welch’s Hawk Tuah (HAWK) memecoin has taken a nosedive, losing 91% of its value just hours after its launch on Dec. 4. The event has sparked widespread backlash, with allegations of insider activity and sniper wallets dominating the conversation.

Rapid Rise and Devastating Fall

HAWK debuted at 10:00 pm UTC, quickly reaching a staggering market cap of $490 million. However, in less than three hours, its valuation plummeted to $41.7 million, according to data from DexScreener. The crash left investors reeling and prompted accusations of foul play.

On-chain analysis from platforms like Bubblemaps revealed that insider wallets and sniper wallets — entities that quickly purchase large token supplies at launch — controlled between 80% and 90% of HAWK’s supply.

One sniper wallet reportedly acquired 17.5% of the token’s supply for 4,195 Wrapped Solana (WSOL), equivalent to $993,000 at the time. Over the next 90 minutes, the wallet sold off its tokens for a profit of $1.3 million, exacerbating the token’s rapid decline.

Welch Denies Allegations

Haliey Welch, a popular influencer and the face behind HAWK, took to social media to deny any wrongdoing. In a Dec. 5 post on X (formerly Twitter), Welch claimed her team hadn’t sold any tokens and that no influencers received free coins.

“We tried to stop snipers as best we could through high fees at launch on the decentralized liquidity protocol Meteora,” she stated. Despite these measures, on-chain data suggests the safeguards were insufficient to prevent large-scale exploitation.

The crash left many investors facing significant losses. One user lamented losing $43,000, while another reportedly swapped $1.4 million worth of the memecoin MOODENG into HAWK, only to lose over $1.3 million in the process.

Legal Concerns and Regulatory Risks

The controversy surrounding HAWK’s launch has drawn the attention of legal experts and regulators. Some investors have filed complaints with the U.S. Securities and Exchange Commission (SEC), alleging misconduct.

Law firms, including Burwick Law, have already begun advertising services to assist those who lost money during the launch. A Dec. 5 post from the firm encouraged affected individuals to explore their legal options.

With its value in free fall and accusations mounting, the future of HAWK remains uncertain. Welch’s reputation and potential regulatory action could play a significant role in determining whether the memecoin can recover from its disastrous start.

HAWK’s launch serves as a cautionary tale for investors in the memecoin space. While hype and influencer backing may generate initial excitement, due diligence and awareness of risks are essential to avoid devastating losses.