Pump.fun, a platform for creating Solana memecoins, is facing a proposed class-action lawsuit that accuses it of dealing in “unregistered security memecoins,” which allegedly generated nearly $500 million in revenue for the company. The lawsuit was initiated by Diego Aguilar in a federal court in New York on 30 January 2025.
Allegations Against Pump.fun
The legal complaint asserts that Pump.fun, purportedly operated by the Baton Corporation based in the United Kingdom, employed aggressive marketing tactics to create a false sense of urgency around its “highly volatile” tokens. This approach has reportedly led to significant financial losses for retail investors.
According to the suit, “Pump.fun’s primary function is to collaborate with influencers to issue and promote unregistered securities. Its operations showcase a disturbing evolution of Ponzi and pump-and-dump schemes.”
Notably, the lawsuit also names Baton Corporation officers Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, all of whom are registered with the United Kingdom Companies House.
Investor Experiences
Aguilar claims to have purchased various memecoins from Pump.fun, yet the lawsuit encompasses all tokens traded on the platform, which are categorised as “unregistered security memecoins.”
The suit contends that Pump.fun acted as both an issuer and a statutory seller, exerting control over the tokens' technical framework, liquidity, pricing, and promotional activities.
Legal Violations and Demands
The legal action cites breaches of the Securities Act and requests several forms of relief. These include the rescission of all token purchases, financial restitution for investors who have been negatively impacted, and coverage of litigation expenses.
As of now, Pump.fun and Baton Corporation have not responded to requests for comments, and details regarding the lawyers representing the defendants are not readily available.
Background Context
In mid-January, the US law firm Burwick Law announced that it was pursuing legal measures against Pump.fun, claiming that investors had incurred losses due to memecoin rug pulls and “unfulfilled promises.”
The firm highlighted that “In recent months, Pump.fun has accrued hundreds of millions of dollars in fees while hosting content that includes illicit drug use, self-harm, racism, antisemitism, lewd acts, bestiality, violence, and other antisocial behaviours.”
Surge in Activity
Usage of Pump.fun surged dramatically in the preceding week, achieving an all-time high of $3.3 billion in weekly trading volume. This spike in activity coincided with the introduction of memecoins associated with the Trump family, igniting interest and participation on the platform.
Conclusion
The unfolding situation surrounding Pump.fun raises critical questions about the nature of memecoins and their regulatory status. As the lawsuit progresses, the implications for the platform and its users could be significant, potentially reshaping the landscape for similar ventures within the cryptocurrency market. Investors and stakeholders will be closely monitoring the developments as the legal proceedings unfold.
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