Solana chain meme coin issuance platform Pump.fun has become a big winner in this market cycle, having been online for only a year, it has continued to ignite the Solana ecosystem's mass token issuance trend. However, on Thursday, Pump.fun faced a new class-action lawsuit, with the platform and its executives accused of violating U.S. securities laws by helping users create meme coins and collecting nearly $500 million in fees.
Pump.fun Accused of Securities Law Violations
Coindesk reported that the lawsuit was filed in the U.S. District Court for the Southern District of New York, with the core dispute being the long-standing issue in the cryptocurrency industry, namely, when should a token be considered a security? The lawsuit claims that each token created using the Pump.fun platform is a security and therefore subject to U.S. securities laws.
However, this issue still lacks a clear legal conclusion, and under the leadership of the new Trump administration, the U.S. Securities and Exchange Commission (SEC) is changing its cryptocurrency regulatory strategy, establishing a new cryptocurrency task force to establish a clear regulatory framework for the industry.
The lead plaintiff in the Thursday lawsuit, Diego Aguilar, claims that he suffered losses when trading the three meme coins FWOG, FRED, and GRIFFAIN created on Pump.fun, and is seeking compensation for his losses and legal fees.
Although Pump.fun itself did not directly create these tokens, the complaint alleges that the platform "through providing automated tools, enabled anyone to create and sell virtually worthless digital tokens in a matter of minutes," and therefore should be considered a "joint issuer" of all the tokens issued on its platform.
Diego Aguilar's lawsuit names Baton Corporation, the UK-registered operating company of Pump.fun, and its three co-founders, including Chief Operating Officer Alon Cohen, Chief Technology Officer Dylan Kerler, and Chief Executive Officer Noah Tweedale, as defendants.
Platform Repeatedly Embroiled in Legal Disputes
The law firm filing the lawsuit is Wolf Popper LLP, based in New York, which just two weeks ago filed another class-action lawsuit against Pump.fun, alleging that Baton Corporation and its three co-founders sold unregistered PNUT token securities, on January 16. Wolf Popper LLP, along with the cryptocurrency-focused law firm Burwick Law, have also recently filed a class-action lawsuit against the promoters of the meme coin HAWK.
Although Pump.fun has only been online for a year, the platform has repeatedly found itself embroiled in legal disputes. Last March, the UK financial regulator issued a warning about the platform, leading Pump.fun to ban UK users, and the platform has also faced criticism over its now-defunct live streaming feature, which allowed some users to promote their tokens through violent or pornographic content.
