Pump.fun Faces Class Action Lawsuit Over Alleged Securities Violations

Investor Lawsuit Alleges Pump.fun Enabled Fraudulent Securities Offerings

Memecoin launchpad Pump.fun is facing a class-action lawsuit accusing it of offering "highly-volatile" unregistered securities and profiting nearly $500 million in fees while violating U.S. securities laws.

Lawsuit Claims Pump.fun Tokens Qualify as Securities

Filed in the Southern District of New York on January 30, the lawsuit, led by plaintiff Diego Aguilar, argues that all tokens created on Pump.fun are effectively securities and should be subject to regulatory oversight. The suit names Baton Corporation, the entity behind Pump.fun, and its three founders—Alon Cohen, Dylan Kerler, and Noah Tweedale—as defendants. Aguilar alleges that Pump.fun deliberately lured inexperienced traders by marketing memecoins as high-return investments on social media, particularly targeting younger audiences via TikTok. His legal team claims the platform engaged in "a novel evolution in Ponzi and pump-and-dump schemes," deliberately facilitating speculative trading while neglecting investor protection measures such as know-your-customer (KYC) and anti-money laundering (AML) protocols.

Pump.fun’s Growing Legal Challenges

This is not the first lawsuit against Pump.fun. The platform is already facing two other class-action suits over alleged securities violations involving the PNUT and HAWK tokens. Despite the legal challenges, Pump.fun continues to generate substantial revenue, raking in $116.72 million in fees in January alone, according to The Block’s data dashboard. As regulatory scrutiny intensifies, the case could set a precedent for how memecoin platforms are treated under U.S. securities law.