Pump.fun, a popular memecoin generator, finds itself at the center of a new 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 generated nearly $500 million in fees while offering unregistered securities. Plaintiff Diego Aguilar alleges that he suffered financial losses after purchasing several tokens on the platform, including the Fwog token and Griffain (GRIFFAIN). These tokens were aggressively marketed through memecoin culture and promises of rapid returns, despite their volatility.
Pump.fun's Structure and Other Lawsuits
This lawsuit is part of a growing legal wave against crypto platforms engaging in questionable activities. Another case filed earlier this month by Burwick Law on behalf of Kendall Carnahan targeted Pump.fun over the sale of its Peanut the Squirrel Token. The legal complaint accuses the platform of operating a 'co-issues and markets unregistered securities' and describes the company's activities as a new form of Ponzi and pump-and-dump schemes.
SEC's Changing Approach to Crypto Regulation
The U.S. Securities and Exchange Commission (SEC) is currently grappling with how to classify digital assets, particularly memecoins like those offered by Pump.fun. While the SEC has historically been hesitant to classify many crypto tokens as securities, the question remains unresolved. Under the newly elected administration of President Donald Trump, the SEC has indicated it may take a more active role in regulating crypto.
The Pump.fun story highlights the complicated relationship between crypto platforms and existing laws, potentially shifting the overall approach to digital asset regulation in the future.
