Possible Charges Haliey Welch May Face if SEC Investigates HAWK Launch

Influencer Haliey Welch’s launch of the Hawk Tuah (HAWK) memecoin faced heavy scrutiny after it plunged 91% in just three hours, with allegations of insider trading, sniping, and fee extortion. Welch denied these claims, but if the SEC or Department of Justice (DOJ) investigate, she and her team could face serious legal consequences.

If the HAWK token qualifies as a security under the Howey test, the SEC could bring civil charges for securities fraud, such as misrepresentation in the token’s sale. The DOJ could pursue criminal charges like wire fraud or money laundering if intentional deception is proven.

HAWK briefly reached a $490 million valuation before crashing to $30 million, amid accusations that a small group of addresses controlled most of the supply. Insider trading could be a key issue if Welch’s team had non-public information or pre-arranged sales, leading to the price collapse.

Despite Welch’s denials, data suggests that over 80 wallet addresses sold their HAWK holdings, making significant profits. Crypto lawyer Joni Pirovich emphasized that trading on insider information or misleading the public could lead to severe legal repercussions.

The legal status of memecoins is still unclear, but they could be treated as securities if marketed to promise investor profits. If HAWK is deemed a security, Welch could face charges like inadequate disclosures, failing to register as a broker, or violations of anti-money laundering laws.

Penalties for securities fraud or market manipulation can range from hefty fines to long prison sentences. Although the legal treatment of crypto assets could evolve, the situation remains concerning, with potential financial harm to investors. Legal counsel for Welch and her team may be essential as the investigation unfolds.

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