Pump.fun Faces Class Action Lawsuit

Overview
Pump.fun, a platform for launching memecoins, is facing a proposed class action lawsuit alleging the sale of unregistered securities and generating nearly $500 million from fees in violation of U.S. securities laws.

Details of the Lawsuit
The lawsuit, filed by plaintiff Diego Aguilar in the Southern District of New York on January 30, argues that all tokens on Pump.fun’s platform are securities, requiring regulation under U.S. law. The case targets Baton Corporation, which operates Pump.fun, and its founders: Alon Cohen, Dylan Kerler, and Noah Tweedale.

Aguilar reported losses from investments in three memecoins—FRED, FWOG, and GRIFFAIN—marketed as capable of yielding “exponential” returns. The lawsuit claims that Pump.fun specifically targeted younger, less experienced investors through aggressive social media marketing, exploiting the “fear of missing out” with promises of “100x” or “1000x” returns.

Allegations of Misconduct
Plaintiffs asserted that Pump.fun enabled “pump-and-dump” schemes by providing necessary infrastructure while neglecting essential investor protections, including KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols.

Burwick Law and Wolf Popper LLP represent Aguilar and have previously called for additional Pump.fun users who incurred losses to join the suit. This is not Pump.fun’s only legal challenge; it is also involved in two other class action lawsuits concerning different tokens, namely PNUT and HAWK, facilitated by the same legal firms.

Despite ongoing legal troubles, Pump.fun remains a profitable platform, reportedly earning over $116 million in fees in January alone, as per The Block’s data dashboard.