On the Solana blockchain, Haliey Welch, who gained notoriety for her “Hawk Tuah” TikTok video, introduced her own cryptocurrency, $HAWK. But soon after its launch, the memecoin’s value fell by 95%.
After initially reaching a market valuation of $500 million, $HAWK swiftly fell below $25 million, causing investors to suffer large losses. When some investors filed charges with the Securities and Exchange Commission (SEC) accusing Welch and her staff of insider trading, the controversy intensified.
Why are memecoins so dangerous, and what are they?
Memecoins are digital currencies that draw inspiration from online trends or memes. Memecoins, in contrast to more established cryptocurrencies like Bitcoin or Ethereum, frequently have no inherent value and instead depend on passion in the community and viral appeal.
Coinbase claims that memecoins, such as Dogecoin and Shiba Inu, are solely speculative trading tools that are usually linked to high risk and volatility. Instead of real-world use cases, their worth frequently varies depending on excitement or endorsements.
Why was $Hawk Tuah the target of criticism?
The cryptocurrency community has criticized the $HAWK Tuah coin’s dismal debut, accusing it of being poorly planned and maybe including foul play.
A Rolling Stone investigation claims that several investors have already complained to the Securities and Exchange Commission (SEC) about the initiative, claiming it was a “rug pull.”
When developers raise the buzz surrounding a cryptocurrency project in an attempt to draw investors and increase its value, this is known as a rug pull.
Also Read – Update Of Haliey Welch’s Detention Regarding Crypto Scam
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