Pump.fun, a popular memecoin generator, is at the center of a new $500 million class action lawsuit accusing the company and its executives of violating U.S. securities laws.
Allegations of Securities Violations
The lawsuit, filed on January 30, 2025, in the Southern District of New York, claims that Pump.fun and its operators, including Baton Corporation Ltd, Alon Cohen, Dylan Kerler, and Noah Bernard Hugo Tweedale, potentially offered unregistered securities. Plaintiff Diego Aguilar claims financial losses after purchasing tokens like Fwog and Griffain (GRIFFAIN), heavily marketed with promises of rapid profits.
Pump.fun's Pyramid-Like Structure
Another case filed earlier this month by Burwick Law on behalf of Kendall Carnahan accuses Pump.fun of selling the Peanut the Squirrel token, describing their activities as a new form of Ponzi and pump-and-dump schemes. This points to suspicions around unethical practices of creating artificial hype and demand for volatile memecoins.
SEC's Approach to Crypto Regulation
The U.S. Securities and Exchange Commission (SEC) is actively changing its stance on cryptocurrencies. Under President Donald Trump, the SEC has signaled a possible increase in crypto regulation, forming a crypto task force, which may impact current and future legal cases.
The ongoing legal battles and controversies surrounding Pump.fun highlight the complex regulatory and legal status issues of memecoins in the U.S.
