On-chain investigator Coffeezilla recently accused influencer Hailey Welch and the HAWK Memecoin team of defrauding her fans with the recent token launch. The team is facing backlash as the cryptocurrency crashed 94% just over 12 hours after its launch, leaving investors empty-handed.

The rise and fall of the HAWK Memecoin

On Wednesday evening, the crypto community criticized Hailey Welch, popularly known as the “Hawk Tuah” girl, for her HAWK (HAWK) memecoin launch. The meme became popular after a 10-second clip of her saying the catchphrase went viral earlier this year.

Since then, the now-social media influencer has gained a large following and launched various projects, including a dating advice app and the Talk Tuah podcast. In October, Welch shared an edit of himself with various memecoin references such as Dogwifhat’s hat, Mog Coin’s glasses, and the SPX6900 coin as a necklace.

The post said: “Gm The crypto community, however, expressed concern about the possible launch and predicted another celebrity carpet pull in advance.

On November 26th, Welch announced her partnership with Web3 platform overHere to launch the official HAWK memecoin on December 4th, claiming that it is not “just another token launch” and ” will redefine the crypto space.”

When the token went live on Wednesday afternoon, its market cap quickly rose to an impressive $500 million, but plunged 88% within minutes. Top holders dumped their tokens as the price peaked, sending the memecoin into a massive nosedive.

HAWK's market cap plummets in minutes. Source: Dexscreener

Another influencer crypto scam?

As soon as the token crashed, crypto investors, market observers, and on-chain investigators came forward to Welch and the HAWK team, accusing them of insider trading and defrauding investors; Many buyers were Welch fans who appear to be new to the crypto space.

Amid the backlash, the influencer shared the token’s “Hawkanomics,” revealing that only 2% of its supply is earmarked for “free public allocation.” Meanwhile, 17% was committed as part of a “strategic allocation,” fully unlocked at launch and reportedly sent to insider wallets.

Welch shares "Hawkanomics" after backlash. Source: Hailey Welch on X

Bubblemaps data on Dexscreener shows that a group of related wallets controls around 80% of the memecoin supply. Despite Welch’s claim that he did “their best” to stop Sniper, several addresses purchased the memecoin in bulk.

One address managed to capture 17.5% of the offering at launch and sold it shortly thereafter for a profit of around $1.3 million. Meanwhile, crypto investors and Welch fans reported losing thousands of dollars on the token in just ten minutes.

The influencer and the HAWK team denied the insider trading allegation and claimed not to have sold any tokens, but on-chain data appears to suggest otherwise. On Wednesday evening, YouTuber and internet investigator Coffeezilla confronted the Memecoin team in an X Space.

He questioned the team about the over $1 million in fees generated by the token “while tricking fans.” The investigator also suggested that the massive selloff was not primarily due to sniping, but rather due to insider trading “directly related to the creator’s account.”

The team interrupted Coffeezilla and denied the allegations, saying they wouldn’t harass fans “for 50,000.” overHere also announced that they had established a foundation for the project in the Cayman Islands, which required significant funding.

Coffeezilla called the launch the “horrible” launch and claimed that these were “the worst tokenomics” he had seen among all the projects he reviewed, adding that it was a scam.

He further asked where the money from the presale worth around $16.69 million went and the reason for their tokenomics. However, the team silenced their microphone and gave no clear answers.

Ultimately, Welch revealed that she was “going to sleep” after being asked how much they paid with the token. As of this writing, HAWK memecoin is down over 94% from its peak and currently has a market cap of $30 million.

Total crypto market capitalization is at $3.6 trillion in the one-day chart. Source: TOTAL on TradingView.

Featured image from Unsplash.com, chart from TradingView.com