Pump.fun, a popular memecoin generator, is at the center of a new lawsuit accusing the company and its executives of violating U.S. securities laws.
Allegations of Securities Violations and False Promises
The lawsuit, filed in the Southern District of New York, claims that Pump.fun and its operators, including Baton Corporation Ltd and key figures, are involved in the sale of unregistered securities. Plaintiff Diego Aguilar alleges financial losses from purchasing tokens like Fwog and Griffain (GRIFFAIN), which were heavily marketed but proved to be highly volatile.
Pump.fun’s “Ponzi-like” Structure
The legal complaint accuses Pump.fun of engaging with unregistered securities and using new forms of schemes akin to Ponzi. It asserts that the company controlled the technical infrastructure, liquidity, and promotion of tokens, labeling Pump.fun as an issuer and seller under U.S. securities law.
The SEC's Changing Approach to Crypto Regulation
The SEC is examining how to classify digital assets like the memecoins offered by Pump.fun. Despite unclear regulatory stances, the new administration under President Trump suggests more active involvement in crypto regulation, potentially impacting ongoing cases involving companies like Pump.fun.
Amid legal challenges and scrutiny over platform features, Pump.fun continues to attract significant attention, including from regulators seeking to establish clearer guidelines for memecoins.
