Ponzi

Alon

Noah

<ul><li>Pump.fun, a Solana-based memecoin platform, faces a class-action lawsuit alleging it facilitated unregistered securities and profited nearly $500 million in fees</li><li>The lawsuit seeks financial compensation for affected investors and could set a regulatory precedent for similar crypto platforms.</li></ul>Solana-based memecoin creation platform Pump.fun is embroiled in a legal battle as a proposed class-action lawsuit accuses it of issuing unregistered securities and generating nearly $500 million in fees from these activities.The lawsuit, filed by Diego Aguilar in a New York federal court on January 30, 2024, claims that Pump.fun, <a href="https://www.ethnews.com/pumpfun-corp-faces-legal-battles-over-alleged-securities-violations-and-meme-token-scandals/" rel="noopener noreferrer nofollow">allegedly</a> operated by UK-based Baton Corporation, capitalized on retail investors by promoting volatile tokens through aggressive marketing tactics.According to the complaint, Pump.fun’s business model revolves around collaborating with influencers to launch and promote unregistered securities, akin to modern-day Ponzi and <a href="https://www.ethnews.com/meme-coin-market-cap-drops-40b-but-pump-fun-hits-revenue-milestone/" rel="noopener noreferrer nofollow">pump-and-dump</a> schemes.The suit targets all memecoins facilitated by the platform, branding them as “unregistered security memecoins” that led to substantial financial losses for retail investors.The lawsuit also implicates Baton Corporation’s officers, Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, citing their involvement in orchestrating Pump.fun’s operations. It further alleges that Pump.fun acted as an issuer and statutory seller, maintaining control over the tokens’ technical infrastructure, liquidity, pricing, and promotional strategies.Seeking justice under the Securities Act, Aguilar’s lawsuit demands the rescission of all token purchases, monetary compensation for impacted investors, and coverage of litigation expenses. The allegations have drawn attention to the broader implications for the cryptocurrency industry, particularly concerning regulatory oversight and investor protections.Pump.fun has yet to respond to the allegations, and attempts to reach the platform and Baton Corporation for comments were unsuccessful. Information regarding the legal representation of the defendants was also unavailable at the time of reporting.In related developments, US law firm Burwick Law announced its intention to pursue legal action against Pump.fun, citing investor losses due to <a href="https://www.ethnews.com/solana-price-rockets-past-200-after-pump-fun-executes-55m-sol-sale/" rel="noopener noreferrer nofollow">memecoin</a> rug pulls and unmet promises. Burwick Law’s statement further criticized Pump.fun for profiting massively while allowing the platform to be a breeding ground for illicit and antisocial activities.The <a href="https://www.courtlistener.com/docket/69593359/aguilar-v-baton-corporation-ltd-dba-pumpfun/" rel="noopener noreferrer nofollow">lawsuit</a> comes amid a surge in Pump.fun’s usage, coinciding with the launch of Trump family-themed memecoins. In mid-January 2024, the platform reported a record $3.3 billion in weekly trading volume, propelled by the popularity of these controversial tokens. The incident has sparked renewed scrutiny over the role of memecoin platforms in the cryptocurrency ecosystem and the need for comprehensive regulation to protect investors.The outcome of this lawsuit could have far-reaching consequences for Pump.fun and similar platforms. If found guilty of violating securities laws, Pump.fun may face severe financial penalties and increased regulatory oversight, potentially dampening its rapid growth and market influence.As the case unfolds, it underscores the persistent risks associated with the burgeoning world of memecoins and the need for investors to exercise caution in navigating this volatile market landscape.The post <a href="https://www.ethnews.com/pump-funs-500m-windfall-challenged-in-court-over-alleged-unregistered-securities/" rel="noopener noreferrer nofollow">Pump.fun’s $500M Windfall Challenged in Court Over Alleged Unregistered Securities</a> appeared first on <a href="https://www.ethnews.com" rel="noopener noreferrer nofollow">ETHNews</a>.

Pump.fun’s $500M Windfall Challenged in Court Over Alleged Unregistered Securities

ETHNews

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