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Pump.fun Faces Lawsuit Alleging All Memecoins Are Securities
A class-action lawsuit has been filed against Pump.fun, accusing the platform of selling unregistered securities through its memecoin creation platform on the Solana blockchain. The lawsuit claims that every token created on the platform is an unregistered security and that Pump.fun has earned nearly $500 million in fees from these tokens.
The plaintiff, Diego Aguilar, alleges that Pump.fun used aggressive marketing tactics to manipulate investors, creating artificial urgency around highly volatile memecoins that led to major financial losses for retail investors. The lawsuit states that the platform worked with influencers to promote unregistered securities and deliberately inflated token prices before allowing them to collapse, a tactic known as a pump-and-dump scam.
Aguilar argues that Pump.fun operated like a Ponzi scheme, luring investors with promises of quick profits while profiting from their losses. He does not limit his lawsuit solely to the memecoins he purchased, but instead claims that every token launched on the platform qualifies as an unregistered security.
The lawsuit also names Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, who serve as officers of Baton Corporation, the parent company of Pump.fun. The court is demanded to cancel all token purchases made through Pump.fun, seeking financial compensation for affected investors and covering legal fees and litigation costs.
This development comes after Burwick Law, a U.S. law firm, warned in mid-January that it was preparing legal action against Pump.fun. Burwick Law claims that investors have lost money due to rug pulls and broken promises made by memecoin creators using the platform. The law firm also accused Pump.fun of failing to protect investors from fraudulent token launches and misleading marketing, as well as allowing harmful content on the platform, including references to drug use, self-harm, racism, and violent acts.
Despite these legal challenges, Pump.fun has experienced a surge in trading activity, with its platform recently reaching an all-time high of $3.3 billion in weekly trading volume. A portion of this growth is linked to the launch of Trump family-themed memecoins, which attracted significant speculation and trading interest.
Pump.fun and Baton Corporation have not responded to the lawsuit, nor has any public information been available regarding legal representatives for the defendants.
Source: coinchapter.com
