Hawk Tuah Girl Cleared by SEC—But Why Is $HAWK Down 95%?

Hailey Welch, popularly known as the “Hawk Tuah” girl, has been officially cleared of any illegality by the U.S. Securities and Exchange Commission (SEC). The regulator shut down its probe into her reputational meme coin, $HAWK, after discovering no case of fraud or ill intent on Welch’s part.

The $HAWK token experienced a meteoric rise to a valuation of $500 million, only to crash by 95% in just 20 minutes. The unexpected collapse sent investors into a panic and prompted widespread rumors of a pump-and-dump operation. Upon reviewing the situation thoroughly, the SEC concluded that Welch had not participated in any illegal activities involving the token’s release and subsequent plummeting.

A Dramatic Rise and Fall

Its rollout was greeted by fervent buzz, driving the market valuation of $HAWK into hundreds of millions immediately. Within just a few hours, the price of the token fell to levels below $60 million, a move that caught many investors on the hook. This sharp price decline spawned theories of market manipulation, with many speculating the token creators were behind a prototypical pump-and-dump plot.

Despite these charges, the SEC wrapped up its probe without levying any charges or financial penalties against Welch. Responding to the issue, Welch said, “The investigation is closed, and I will not face any charges or monetary sanctions.”

SEC’s Stance on Meme Coins

One of the primary reasons that went into the SEC’s determination was its recent assertion that meme coins are not securities. This argument greatly affected the decision of the investigation, since it indicated that $HAWK was not within the jurisdiction of the SEC.

But the wider debate over regulatory control of meme coins continues. Most in the financial and crypto industries are still worried about the frequency of so-called “rug pulls,” when creators of projects leave tokens behind after making money off their initial run-up. The absence of clear rules makes investors susceptible to huge losses, and demands for tighter regulation continue to increase.

What Experts Are Saying

Legal commentators and finance analysts have responded to the SEC’s ruling with differing views of its implications. Former SEC attorney Marc Fagel explained that the SEC’s ruling did not indicate Welch was acquitted of misconduct. Rather, he noted that “the SEC did not find ‘no wrongdoing.’ That’s not something the SEC ever says when closing an investigation.”. Instead, the present administration has stated that meme coins are not securities and therefore the SEC does not have jurisdiction.

Likewise, legal commentator James Murphy, nicknamed Metalawman, said the SEC’s action was not a surprise. He elaborated, “Meme coins are not usually treated as securities, so the SEC cannot have jurisdiction. The SEC is concentrating on its fundamental roles these days. If there was fraud involved in the launch, criminal prosecutors or state consumer protection agencies might investigate.”

The Ongoing Debate Over Meme Coin Regulations

While Welch has thus far escaped legal action from the SEC, the scandal over $HAWK has reopened debates regarding the necessity of more stringent regulations in the crypto market. As meme coins continue to be a source of fascination and speculation, regulators and investors alike are forced to contend with an ever-more complicated financial environment.

Though Welch has put the SEC’s inquiry behind him, the crypto world is still split on how to treat these volatile instruments. Whether tighter regulation will be implemented is yet to be seen, but one thing is for sure: meme coins are here to stay, and they present both opportunities and dangers for investors across the globe.