Cryptocurrency platform Pump.Fun and its top leadership are facing a class action lawsuit that claims investors were exposed to substantial financial risks, and nearly $500 million in fees were lured by issuing unregistered and volatile meme coins, breaching US securities protocols.
Allegations Against Pump.Fun
The company and its leadership are accused of developing complex Ponzi and market manipulation schemes, drawing investors into loss-making meme coins. The plaintiff argues that all tokens under Pump.Fun are securities, which must comply with US law.
Automated Tools Offered by Pump.Fun
Plaintiff Diego Aguilar initiated the lawsuit after losing money on meme coins created on the platform. He argues that Pump.Fun provides tools that allow anyone to create and sell near-worthless tokens, making the platform a 'joint issuer' of all tokens. Aguilar is suing Baton Corp. and three of its founders, who have yet to respond.
Cryptocurrency Regulation in the US
The US Securities and Exchange Commission (SEC) has established a task force to create a clear regulatory framework for crypto assets. The group is led by Commissioner Hester Peirce, who is actively working with the crypto community for better regulations. The team also provides technical assistance to Congress in developing crypto policy.
Cryptocurrency continues to face legal challenges, and the outcome of the Pump.Fun case will indicate how relevant laws will evolve in the future. Changes in regulation could impact the entire cryptocurrency industry.
