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Pump.fun Faces Lawsuit Alleging All Memecoins Are Securities
A class-action lawsuit has been filed against Pump.fun, alleging that all memecoins created and traded on the platform are in fact unregistered securities. The lawsuit, filed by Diego Aguilar in a New York federal court, claims that Pump.fun’s memecoin creation platform is not just a simple exchange but an active participant in selling these securities.
The lawsuit accuses Pump.fun of manipulating prices and controlling marketing efforts to inflate token values before allowing them to collapse, resulting in financial losses for many investors. The complaint also asserts that the company has profited greatly from these losses, taking nearly $500 million in fees since its inception.
Furthermore, Aguilar argues that every memecoin created on the platform is an unregistered security and should be treated as such under federal securities laws. The lawsuit demands that all token purchases made through Pump.fun be canceled, investors seek financial compensation for their losses, and the company pay legal fees and litigation costs.
This complaint follows a warning issued by Burwick Law in mid-January regarding potential legal action against Pump.fun. Burwick Law accused the platform of allowing fraudulent token launches and failing to protect investors from such occurrences.
In spite of these legal troubles, Pump.fun has experienced an unprecedented surge in trading activity, with weekly volumes reaching an all-time high of $3.3 billion due partly to the launch of memecoins themed after the Trump family.
As of now, neither Pump.fun nor Baton Corporation have publicly responded to the lawsuit or its allegations.
Source: coinchapter.com
