Hawk Tuah Memecoin Plunges Amid Insider Trading and Sniping Accusations

Hawk Tuah Memecoin Plunges After Accusations of Insider Trading

As a result of accusations of insider trading and sniping, influencer Haliey Welch‘s Hawk Tuah (HAWK) memecoin had a terrible debut this week, dropping 91% in just three hours. No inquiry has been declared by authorities, and Welch has refuted these allegations. Welch and her team might be subject to intense legal scrutiny, though, if the Department of Justice (DOJ) or the US Securities and Exchange Commission choose to look into the contentious launch.

Insider Trading or Market Manipulation? HAWK Token’s Legal Future Uncertain

If HAWK passes the Howey test as a security, the SEC may file civil charges for securities fraud, claiming deception or misrepresentation in the securities transactions, according to Yuriy Brisov, a partner at the law firm Digital and Analogue Partners. If deliberate deception or financial misbehavior is proven, the DOJ may take criminal charges, such as wire fraud or money laundering, into consideration. According to Brisov, the token’s classification as security determines whether the accusations amount to insider trading.

Insider trading traditionally involves trading securities based on material, non-public information, breaching a duty of trust or confidence. In the context of cryptocurrencies, the legal framework is still evolving. If Welch’s team possessed non-public information about the token’s launch or had pre-arranged strategies to sell significant portions of the supply, leading to the token’s price collapse, such actions could be scrutinized under fraud or market manipulation statutes.

Brisov

Over 80 Wallets Linked to Hawk Tuah (HAWK) Token Sale Spark Insider Trading Debate

On behalf of her team and any associated key opinion leaders (KOLs), Welch publicly denied engaging in insider trading.

Team hasn’t sold one token and not 1 KOL was given 1 free token. We tried to stop snipers as best we could through high fees in the start of launch on Meteora.

Welch

Nevertheless, a string of over 80 wallet addresses that had not bought the token—indicating that they had been given tokens prior to the launch—are displayed in aggregated data from Dexscreener and Solana block explorer Solscan. All of these wallet addresses sold their HAWK holdings for profits ranging from $10,000 to $365,000.

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