Pump.fun, a popular memecoin generator, is at the center of a class action lawsuit accusing it of violating U.S. securities laws.
Allegations of Securities Violations
The lawsuit was filed on January 30, 2025, in the Southern District of New York. It claims that Pump.fun generated nearly $500 million in fees while offering unregistered securities. Plaintiff Diego Aguilar alleges financial losses after purchasing several tokens on the platform, such as Fwog and Griffain. These tokens were marketed through memecoin culture with promises of rapid profit.
Pump.fun’s “Ponzi-like” Structure
The lawsuit also accuses Pump.fun of running a platform offering unregistered securities and using influencers to create artificial hype around memecoins. Thus, the platform is being characterized as a new form of 'Ponzi' and 'pump-and-dump' schemes.
The SEC's Changing Approach to Crypto Regulation
The U.S. Securities and Exchange Commission (SEC) is grappling with how to classify digital assets. Under President Donald Trump's new term, the SEC may take a more active role in crypto regulation by forming a task force to set clear rules.
The Pump.fun case is part of a wider trend of increasing legal scrutiny on cryptocurrency platforms, highlighting the need for clearer regulatory frameworks for digital assets.
