Pump.fun, a popular memecoin generator, is 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 and False Promises
The lawsuit targets Pump.fun and its operators, including Baton Corporation Ltd and key figures Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale. Plaintiff Diego Aguilar claims financial losses after purchasing tokens like the Fwog token and Griffain (GRIFFAIN) on the platform, promoted through memecoin culture and promises of rapid returns.
Pump.fun's "Ponzi-like" Structure
The legal complaint accuses Pump.fun of operating a platform co-issuing and marketing unregistered securities, using influencers to generate hype around volatile memecoins, leading to uninformed purchases by retail investors.
The SEC's Changing Approach to Crypto Regulation
The SEC continues to grapple with classifying digital assets, particularly memecoins. Under President Donald Trump's administration, the agency may become more active in regulating crypto, impacting legal battles involving companies like Pump.fun.
Pump.fun faces significant legal and reputational challenges amidst accusations of securities law violations and controversial marketing practices.
