The Consumer Financial Protection Bureau (CFPB) has launched an investigation into crypto influencer Hailey Welch and her recent memecoin initiative, $HAWK TUAH, amid allegations of fraudulent maneuvers, consumer deception, and potential money laundering.
Welch, a well-known personality on Crypto Twitter, first rose to fame through her viral "Hawk Tuah" video in 2024. The clip garnered millions of views, transforming her into a beloved internet meme and opening doors to podcast hosting and crypto endorsements. Leveraging her online popularity, Welch announced the launch of $HAWK in late November, touting it as a community-focused project aimed at onboarding non-crypto enthusiasts into the blockchain space.
The $HAWK Scandal
Initially presented as a transparent initiative with a detailed tokenomics roadmap, $HAWK quickly became embroiled in controversy. Blockchain analysts identified irregular token distributions, revealing that over 90% of the coin supply was allocated to newly created wallets. These wallets rapidly sold off their allocations, causing the coin's value to plummet and leaving retail investors with substantial losses. Welch’s team allegedly profited between $1.5 million and $2 million through these sales.
Many investors have accused Welch of misleading them by promoting the memecoin as a safe, community-driven project while secretly orchestrating a scheme to inflate her own profits. Critics have called the maneuver a textbook "rug pull," where developers intentionally deplete project funds and abandon investors.
CFPB’s Focus
The CFPB, tasked with protecting consumers from deceptive financial practices, is investigating whether Welch violated federal laws by misleading her fanbase about the coin’s purpose and risks. The agency is also probing whether the memecoin campaign was designed to exploit inexperienced investors, many of whom were drawn in by Welch’s celebrity status and assurances of inclusivity.
CFPB investigators are working alongside blockchain experts to trace funds, evaluate marketing claims, and determine whether Welch's team engaged in illegal money laundering activities through the rapid liquidation of $HAWK tokens.
What’s Next for Welch?
If the CFPB finds sufficient evidence of wrongdoing, Welch will face severe penalties, including substantial fines, restitution payments to defrauded investors, and criminal charges. The agency may also refer the case to the Department of Justice (DOJ) for further prosecution.
For now, Welch has not publicly commented on the investigation. Meanwhile, consumer advocacy groups are urging regulators to strengthen oversight of cryptocurrency markets, particularly as more influencers like Welch enter the space with little accountability.
The CFPB’s probe marks a significant moment in the ongoing effort to protect consumers in the volatile world of digital assets. As the investigation unfolds, Welch’s rise from internet fame to crypto notoriety may serve as a cautionary tale for both influencers and investors alike.