The suit was filed in the Southern District of New York (SDNY) on Thursday. It claims the platform earned nearly $500 million in fees.
It alleges Pump.Fun enabled users to create and sell memecoins that should be classified as securities.
Lawsuit Challenges Pump.Fun’s Role in Token Issuance
At the heart of the lawsuit is a major question that has long dogged the crypto industry: When is a token considered a security? The plaintiffs argue that all tokens generated on Pump.Fun’s platform falls under U.S. securities laws, making the company liable. However, this issue remains far from settled, especially as the U.S. SEC under the new Trump administration is reworking its approach to crypto regulation.
The lead plaintiff, Diego Aguilar, claims he lost money trading three Pump.Fun-created tokens—FWOG, FRED, and GRIFFAIN. The lawsuit accuses Pump.Fun of orchestrating a scheme by providing automated tools that allow users to launch and sell “nearly worthless digital tokens” within minutes. As a result, the suit alleges that Pump.Fun should be considered a “joint issuer” of every token launched on its platform, making it responsible for compliance with securities laws.
🚨 LATEST: Pump. fun has been hit with a class action lawsuit accusing it of violating the US securities laws, claiming that all memecoins on the platform are securities. pic.twitter.com/znmnCywmsN
— Cointelegraph (@Cointelegraph) January 31, 2025
The suit names U.K.-registered Baton Corporation as the operator of Pump.Fun and identifies three of its co-founders: COO Alon Cohen, CTO Dylan Kerler, and CEO Noah Tweedale. When asked for comment, Cohen declined to speak on behalf of the company. The other executives could not be reached at the time of publication.
Pump.Fun Faces Multiple Legal Battles
This isn’t Pump.Fun’s first legal rodeo. Just two weeks ago, the same law firm, Wolf Popper LLP, filed a separate class action suit against the company over the PNUT token, a Solana-based memecoin inspired by Peanut the Squirrel. That token reportedly hit a $1 billion market cap before tumbling 89% from its peak.
**LAWSUIT ALERT**
Burwick Law and @WolfPopperLLP have filed a second federal class action lawsuit on behalf of investors against the PumpdotFun platform.
Full complaint available below.
— Burwick Law (@BurwickLaw) January 30, 2025
As the SEC works to establish a clear regulatory framework for the crypto industry. Cases like this could set the stage for future rulings. A ruling for the plaintiffs could spark more lawsuits against memecoin platforms.
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