Solana’s Biggest Memecoin Platform Accused of Securities Fraud

Last Updated on January 31, 2025

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PumpFun logo in front view. Source: cryptoFX - stock.adobe.com

Key Takeaways:

  • Pump.fun Lawsuit: A class-action lawsuit alleges that all memecoins launched on Pump.fun qualify as unregistered securities, generating nearly $500 million in fees.
  • Legal Claims: The suit accuses Pump.fun of using aggressive marketing and influencer-driven tactics to promote volatile tokens, likening its operations to Ponzi and pump-and-dump schemes.
  • Regulatory Scrutiny: This follows a previous lawsuit citing investor losses and claims of illicit content on the platform, even as Pump.fun hit record trading volumes.

Solana-based memecoin platform Pump.fun is facing a class-action lawsuit alleging that all tokens launched through its service are unregistered securities.

Filed on January 30 in a New York federal court, the lawsuit, brought by Diego Aguilar, claims Pump.fun has generated nearly $500 million in fees while misleading retail investors.

The platform, operated by UK-based Baton Corporation, is accused of using aggressive marketing to create artificial urgency around volatile tokens, leading to significant investor losses.

The suit alleges that Pump.fun collaborates with influencers to promote “unregistered security memecoins” and functions as both an issuer and statutory seller, controlling liquidity, pricing, and promotion.

It names Baton Corporation executives Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale as defendants.

Aguilar seeks rescission of token purchases, monetary damages, and coverage of litigation costs.

This lawsuit follows another legal challenge earlier in January from Burwick Law, citing investor losses from alleged rug pulls and offensive content on the platform.

Despite legal scrutiny, Pump.fun’s trading activity has surged, reaching $3.3 billion in weekly volume after the launch of Trump-themed memecoins.

The company has not commented on the lawsuit, and its legal representation remains unclear.

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