A proposed class action lawsuit has been filed against Pump.fun, a platform that allows users to create meme coins on the Solana network, for allegedly offering unregistered securities.
A proposed class action lawsuit has been filed against Pump.fun, a platform that allows users to create meme coins on the Solana network, for allegedly offering unregistered securities.
The suit claims that the company and its founders Alon Cohen, Dylan Kerler, and Noah Tweedale have engaged in practices that violate U.S. securities laws.
The lawsuit, initiated by plaintiff Diego Aguilar in the Southern District of New York on Jan. 30, accuses Pump.fun of generating close to $500 million from fees while marketing its tokens—specifically FRED, FWOG, and GRIFFAIN—as having the potential for “exponential” returns. Aguilar alleges that he suffered financial losses from investing in these meme coins.
According to the filing, all tokens issued on the Pump.fun platform are deemed securities and should be regulated accordingly.
The lawsuit asserts that the platform's core operations involve collaboration with influencers to promote these unregistered securities, likening its activities to a modern evolution of Ponzi and pump-and-dump schemes.
The legal action claims that Pump.fun intentionally targeted younger and less experienced investors through social media marketing, particularly on platforms like TikTok. The marketing campaigns reportedly exploited the "fear of missing out," promoting enticing claims of returns as high as 100x or 1000x.
Aguilar's legal team, which includes Wolf Popper LLP and Burwick Law, has previously called for other users who experienced losses on the platform to join the lawsuit.
The firm has also been involved in two other class action lawsuits linked to the platform—one concerning the PNUT token and another related to the HAWK token.
Despite facing legal challenges, Pump.fun has continued to generate significant revenue. In January alone, the platform reportedly earned $116.72 million in fees.
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