- Pump.fun faces a new class action lawsuit accusing it of profiting $500 million while violating U.S. securities laws.
- The lawsuit claims Pump.fun enabled the creation of “worthless” tokens, including FWOG, FRED, and GRIFFAIN.
- The platform has faced multiple legal and regulatory challenges, including a ban on U.K. users and criticism over inappropriate livestream promotions.
Memecoin generator Pump.fun finds itself in hot water once again. On Thursday, the platform was hit with a fresh class action lawsuit, accusing the company and its execs of pocketing nearly $500 million in fees while allegedly breaking U.S. securities laws.
The lawsuit, filed in the Southern District of New York (SDNY), centers on one of crypto’s most debated questions: when is a token considered a security? According to the suit, every token made on Pump.fun’s platform fits that definition, which would mean they fall under U.S. securities laws. But let’s be real—this is anything but settled law. The SEC under Donald Trump’s administration has been reworking its approach to crypto regulation, even forming a new task force to create a clearer rulebook for the industry.
The Claims
Diego Aguilar, the lead plaintiff, claims he lost money trading three Pump.fun-created tokens: FWOG, FRED, and GRIFFAIN. The lawsuit doesn’t accuse Pump.fun of directly making these tokens. Instead, it alleges that the platform provided automated tools that let users create and sell “nearly worthless” digital tokens in minutes—effectively making Pump.fun a “joint issuer” of those tokens.
The suit also names Baton Corporation, a U.K.-registered company, as Pump.fun’s operator, along with three co-founders: COO Alon Cohen, CTO Dylan Kerler, and CEO Noah Tweedale. Cohen declined to comment, saying he was only speaking for himself. The other founders couldn’t be reached for a response.
Recurring Legal Trouble
This isn’t the first time Pump.fun has faced legal action. Just two weeks ago, Wolf Popper LLP—one of the firms behind Thursday’s filing—sued the company over a different token, PNUT. That lawsuit alleged that PNUT, a Solana-based memecoin inspired by “Peanut the Squirrel,” reached a $1 billion market cap before crashing 89% from its $2.25 high last November.
Wolf Popper LLP, along with Burwick Law, is also behind a separate class action targeting the HAWK token, linked to influencer Hailey Welch, a.k.a. Hawk Tuah.
Past Controversies
Despite launching just a year ago, Pump.fun has been no stranger to drama. In March, the U.K.’s financial regulator issued a warning against the platform, prompting it to ban U.K.-based users. The company also caught flak for a now-disabled livestream feature that reportedly allowed users to promote tokens through NSFW content, including violent and sexual material.
The latest suit is seeking damages and attorneys’ fees. Whether this will push Pump.fun to change its practices—or further entangle it in regulatory battles—remains to be seen. One thing’s for sure: the memecoin space isn’t short on legal fireworks.
