Pump.fun is sued for allegedly illegally selling memecoins and raising millions

• Pump.fun faces lawsuit for selling unregistered tokens.
• Charges involve Ponzi schemes and price manipulation.
• Company collected nearly $500 million in fees.

Pump.fun, a platform known for enabling the creation and trading of memecoins on the Solana blockchain, is facing a new class action lawsuit in the Southern District Court of New York. The lawsuit, filed by Diego Aguilar, alleges that the company collected nearly $500 million in fees by facilitating the issuance and trading of tokens that should have been classified as securities, without complying with regulatory requirements.

**LEGAL ACTION ALERT: PUMPDOTFUN**

Burwick Law is pursuing legal action on behalf of investors in pumpdotfun memecoins. If you lost money on any pumpdotfun memecoins, you may be entitled to compensation.

Read more below.

— Burwick Law (@BurwickLaw) January 15, 2025

The court document argues that all tokens created on Pump.fun are, in effect, securities and therefore should comply with regulatory laws in the United States. The platform’s founders, Alon Cohen, Dylan Kerler and Noah Tweedale, were also named in the lawsuit, accused of co-issuing and promoting these assets in an irregular manner. The complaint characterizes the company’s business model as a new version of Ponzi schemes and “pump-and-dump”, a practice in which assets are artificially inflated before suffering a sharp drop, resulting in losses for investors.

According to Aguilar, he suffered losses when investing in three memecoins created on the platform: FRED, FWOG and GRIFFAIN. The complaint mentions that these tokens were promoted with promises of astronomical returns, attracting mainly less experienced investors, who felt pressured to participate due to aggressive campaigns on social media exploiting the “fear of missing out”.

Another point raised in the lawsuit is the lack of security measures for investors, such as identity verification systems (KYC – Know Your Customer) and anti-money laundering policies. According to the lawyers representing Aguilar, Pump.fun provides all the necessary infrastructure for speculative schemes, but does not adopt mechanisms to protect its users against manipulated losses.

In addition to this lawsuit, the company is already facing two other class action lawsuits related to the PNUT and HAWK tokens, which were also launched on the platform and have seen significant declines after reaching all-time highs. Law firms Wolf Popper LLP and Burwick Law are leading the investigation and encouraging investors who suffered losses to join the lawsuits.

Despite the legal challenges, Pump.fun continues to move large financial volumes. In January 2025 alone, the platform recorded around US$116,72 million in fees, demonstrating that, even with regulatory pressure, there is still strong interest in memecoins within the crypto community.

The case could serve as a regulatory framework for platforms that allow the creation of tokens in a simplified way. If the court decides that Pump.fun tokens are securities, this could lead to changes in the rules of the sector, impacting similar projects and encouraging greater oversight over the cryptocurrency market.