Pump.fun, a token launch platform built on the Solana blockchain, is currently facing a class action lawsuit in federal court. The lawsuit alleges that Pump.fun orchestrated a scheme to issue and promote unregistered securities, violating US securities laws. The plaintiff, Diego Aguilar, filed the lawsuit in the U.S. District Court for the Southern District of New York against Baton Corporation Limited, the entity behind Pump.fun, and its founders, Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale.
Aguilar, represented by Burwick Law, claims that Pump.fun engaged in a systematic pump-and-dump scheme, generating nearly $500 million in fees through the promotion and sale of unregistered securities. Despite these allegations, Pump.fun has not yet issued a public response to the lawsuit.
The lawsuit accuses Pump.fun of functioning as a platform for the sale of unregistered securities, collaborating with influencers to generate speculative interest in its tokens. Aguilar, who suffered losses from investing in FRED, FWOG, and GRIFFAIN tokens, asserts that the platform utilized aggressive marketing strategies to create a facade of legitimacy while operating what the lawsuit describes as a combination of Ponzi and pump-and-dump schemes.
Court documents reveal that Pump.fun implemented a standardized token infrastructure for all memecoins launched on its platform, including a bonding curve mechanism that determined token pricing based on demand. This structure allegedly rendered all tokens on the platform as unregistered securities under federal law.
Furthermore, the lawsuit claims that Pump.fun neglected basic investor protections such as Know Your Customer verification and anti-money laundering protocols, enabling minors to invest in speculative assets without oversight. The platform is also accused of launching tokens that promoted antisemitism, racism, and explicit content.
The lawsuit details how Pump.fun promoted tokens like FRED, FWOG, and GRIFFAIN as investment opportunities through influencer campaigns and exchange listings. Each token’s value was heavily reliant on Pump.fun’s marketing efforts, exchange listings, and community engagement, factors that the lawsuit argues classify them as securities under the Howey Test.
This legal action against Pump.fun is the third in recent months, following previous lawsuits related to the launch of PNUT and HAWK tokens. The case raises concerns about the legality of token launchpads and their responsibility in facilitating speculative investments. Aguilar and his legal team are seeking a jury trial to pursue damages and advocate for further regulatory scrutiny of Pump.fun’s business practices.