Pump.fun, a leading memecoin launchpad, is at the centre of a new legal storm as a class-action lawsuit accuses it of violating US securities laws.
The case, filed in the Southern District of New York, claims that all tokens created on Pump.fun qualify as securities and alleges that the platform has generated nearly $500 million in fees by facilitating their launch.
This lawsuit highlights the broader regulatory uncertainty surrounding memecoins and raises questions about whether platforms enabling their creation should be held liable.
While Pump.fun does not directly issue tokens, the complaint argues that by offering an automated system for launching memecoins, the company effectively acts as a “joint issuer.”
The legal battle adds to the growing scrutiny of decentralised finance (DeFi) platforms, with investors and regulators increasingly questioning whether memecoin projects are operating within the boundaries of the law.
Legal fight intensifies as investor losses pile up
The lead plaintiff, Diego Aguilar, claims financial losses from trading tokens FWOG, FRED, and GRIFFAIN, all created on Pump.fun. The lawsuit targets Baton Corporation, a UK-registered entity believed to operate Pump.fun, along with its co-founders.
The case is being handled by Burwick Law and Wolf Popper LLP, which allege that the platform has profited at the expense of investors by enabling rug pulls and fraudulent schemes.
This lawsuit follows previous legal action against Pump.fun, including a case involving the PNUT token, which once reached a $1 billion market cap before plummeting 89%. Another case involved the HAWK token, linked to social media influencer Hailey Welch.
These lawsuits highlight the risks faced by retail investors in the largely unregulated memecoin space, where sudden price collapses and scams are common.
Beyond its legal troubles, Pump.fun also faced controversy when it launched a livestream feature in November 2024, designed to enhance user interaction.
The feature, however, quickly became a problem as users began streaming inappropriate content, including violent footage and disturbing images involving minors and animals.
The backlash was swift, with strong condemnation from the crypto community, leading to the eventual shutdown of the livestream function.
Memecoin boom continues despite regulatory challenges
Despite mounting legal concerns, memecoins have seen explosive growth in early 2025.
Pump.fun recorded a 24-hour trading volume of $295.53 million, with fees soaring to $1.45 billion.
Over the past month, its revenue reached $116.72 million, surpassing major blockchain networks like Solana ($116.46 million) and Ethereum ($107.64 million).
Pump.fun has already faced scrutiny from regulators, including a warning from the UK’s financial watchdog over its business model.
The company also faced backlash for its now-disabled livestream feature, which users exploited for market manipulation.
As the SEC shifts its approach to crypto regulation under the Trump administration, the outcome of this lawsuit could set a precedent for how memecoins and launchpads are classified under US securities laws.
If Pump.fun is found liable, it may force similar platforms to rethink their operations, while a dismissal could embolden the industry.
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