Pump.fun Hit With Class Action Lawsuit, Accused of Securities Violations

• Pump.fun faces a lawsuit for selling unregistered securities via meme coins.  
• Platform’s business model accused of promoting “pump-and-dump” schemes.  
• Previous legal issues include influencer marketing and misuse of live stream features. 

Pump.fun, the memecoin platform, is now at the center of a legal dispute in the United States. A class action lawsuit was filed in the Southern District of New York. It accuses the platform’s operators of breaking U.S. securities laws.

The Allegations Against Pump.fun

The suit, filed by lead plaintiff Diego Aguilar, claims that Pump.fun and its UK-based operator, Baton Corporation Ltd, promoted and sold unregistered securities through its platform. The lawsuit accuses Pump.fun of being a “joint issuer” of meme coins created on its platform. The lawsuit includes three tokens, FWOG, FRED, and GRIFFAIN. Aguilar claims to have suffered financial losses due to these tokens.

He alleges that Pump.fun and its co-founders were involved in the creation, distribution, and ongoing operations of these tokens. According to Aguilar, they had control over their technical infrastructure, liquidity, pricing, and promotion.

Related: Solana-Based Pump.fun Becomes Top Player in Meme Token Deployment

Pump.fun’s Business Model Under Fire

Pump.fun’s business model lets users launch meme coins with minimal technical barriers. Now, it’s being scrutinized for allegedly operating like a “pump-and-dump” scheme.

According to the complaint, the platform generated artificial urgency and hype through guerilla marketing tactics, luring in retail investors with highly volatile tokens. The lawsuit claims that this led to financial losses for investors, including Aguilar. He is now seeking compensation for the damages.

The lawsuit asserts that Pump.fun violated the Securities Act by offering unregistered securities. It is demanding a cancellation of all token purchases, monetary damages, and litigation costs for affected investors.

Previous Legal Troubles and Controversy

This class action is not the first legal challenge for Pump.fun. On January 16, 2025, another lawsuit was filed by Burwick Law, representing an investor. That one targeted the sale of the Peanut the Squirrel meme coin.

Burwick Law accused Pump.fun of joining forces with influencers to co-issue and market unregistered securities. They alleged that Pump.fun collected fees from investors, reportedly nearly half a billion dollars.

Related: Pump.fun vs. SunPump: DWF Labs Analyzes Memecoin Launchpads

Also, Pump.fun faced backlash in November 2024 after launching a live stream function. Users misused it to broadcast disturbing and explicit content. The platform shut down the feature after widespread criticism from the crypto community.