tl;dr
A class action lawsuit was filed in the Southern District of New York against Pump.fun, accusing the platform of violating US securities laws by promoting and selling unregistered securities. The lawsuit claims that Pump.fun facilitated the creation and trading of risky meme coins, creating a specul...
A class action lawsuit was filed in the Southern District of New York against Pump.fun, accusing the platform of violating US securities laws by promoting and selling unregistered securities. The lawsuit claims that Pump.fun facilitated the creation and trading of risky meme coins, creating a speculative and manipulative trading environment. It also alleges that Pump.fun's operations are tied to fraudulent practices, including "pump and dump" schemes. The lead plaintiff, Diego Aguilar, seeks redress for financial losses and aims to address the platform's alleged lack of investor protections. This is not the first lawsuit Pump.fun has faced regarding failed meme coins and questionable projects.
The lawsuit targets UK-based Baton Corporation Ltd, which it claims operates Pump.fun, and its co-founders. According to the complaint, they offered tokens without proper registration with the US Securities and Exchange Commission (SEC). "The Tokens are, and were, securities as defined by the Securities Act," the legal filing stated.
For context, Pump.fun is a platform that makes it easy for anyone to launch a meme coin on Solana. It lowers technical and financial barriers for users. Though not directly involved in the creation of meme coins, the complaint notes that Pump.fun functions as a “joint issuer.” The lawsuit argues that Pump.fun is “exercising comprehensive control over their creation, distribution, and ongoing operations.” Diego Aguilar, the lead plaintiff, claims he lost money trading three specific meme coins created on Pump.fun — FWOG, FRED, and GRIFFAIN. Through this case, Aguilar and other affected investors seek redress for their financial losses.
The lawsuit also highlights Pump.fun’s role in creating a speculative and manipulative trading environment. The platform uses gamified features to encourage the trading of highly volatile and risky meme coins. The complaint argues that these features make it easier for users, sometimes even minors, to create and trade tokens without the protections typically required in securities transactions. "Pump.Fun minimized or omitted crucial investor protections, such as: Know Your Customer (KYC) verification; Anti-Money Laundering (AML) compliance; age verification requirements; and risk disclosures trading limits or other protective mechanisms," the lawsuit said. Moreover, the suit claims that Pump.fun’s operations are tied to a range of fraudulent practices, including "pump and dump" schemes.