Pump.fun, a popular memecoin platform, is currently embroiled in a legal battle in the United States. A class action lawsuit has been filed in the Southern District of New York, alleging that the platform has violated U.S. securities laws.
The lawsuit, led by plaintiff Diego Aguilar, accuses Pump.fun and its UK-based operator, Baton Corporation Ltd, of selling unregistered securities through their platform. Specifically, the lawsuit claims that Pump.fun acted as a “joint issuer” of meme coins such as FWOG, FRED, and GRIFFAIN, resulting in financial losses for investors like Aguilar.
According to Aguilar, Pump.fun and its co-founders were directly involved in the creation, distribution, and management of these tokens. They allegedly had control over various aspects of the tokens, including technical infrastructure, liquidity, pricing, and promotion.
Pump.fun’s business model, which allows users to easily launch meme coins, is now under scrutiny for operating like a “pump-and-dump” scheme. The lawsuit alleges that the platform used aggressive marketing tactics to create hype around highly volatile tokens, leading to financial losses for investors.
In addition to the current lawsuit, Pump.fun has faced legal challenges in the past. A previous lawsuit filed by Burwick Law targeted the sale of the Peanut the Squirrel meme coin, accusing Pump.fun of collaborating with influencers to market unregistered securities and collecting substantial fees from investors.
Furthermore, Pump.fun received backlash in November 2024 for introducing a live stream feature that was misused by users to broadcast inappropriate content. The platform eventually disabled the feature following criticism from the crypto community.
As Pump.fun continues to navigate legal challenges and controversies, investors are advised to exercise caution when engaging with the platform. It is essential to conduct thorough research and seek professional advice before making any investment decisions related to meme coins or similar assets.