The meme coin behemoth, Pump.fun, is overwhelmed with legal issues!
Pump.fun, a site recognized for introducing meme coins on the Solana blockchain, is presently confronting a subsequent class-action suit, exacerbating its already escalating legal difficulties. Is this the final chapter for the meme coin gambling den?
Initiated by Burwick Law and Wolf Popper LLP, the lawsuit asserts that Pump.fun breached U.S. securities regulations by vending unregistered securities presented as meme tokens.
The lawsuit, submitted on January 30th in the Southern District of New York, designates Baton Corporation Ltd (functioning as Pump.fun) and prominent individuals Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale as respondents.
As per court records, the claimant, Diego Aguilar, asserts to have incurred financial setbacks subsequent to acquiring tokens such as Fwog (FWOG) and Griffain (GRIFFAIN) on the platform. These tokens, promoted with assurances of exponential gains, purportedly resulted in substantial losses notwithstanding attaining elevated valuations. For instance, Pump.fun publicized FWOG’s market capitalization as high as $500 million.
This follows a prior case filed on January 16th by Burwick Law on behalf of Kendall Carnahan, targeting the sale of the Squirrel Peanut (PNUT) token. That lawsuit contends that Pump.fun functions by partnering with influencers to co-issue and market unregistered securities, essentially operating a Ponzi scheme and a “pump and dump” operation that has extracted nearly $500 million in fees from investors.
Burwick Law’s legal actions against Pump.fun are unsurprising. On January 15th, the firm’s founder and partner, Max Burwick, openly denounced platforms like Pump.fun.
The intriguing aspect lies in how certain individuals perceive them as the pinnacle of multi-tiered marketing schemes, capitalizing on human vulnerability and the digital focus industry. Toncoin (TON) Value Forecast for March 26th
Simultaneously, his firm urged investors who suffered losses on meme coins because of fraudulent schemes and deceptive pledges to step forward, even establishing a dedicated website to assist impacted clients.
Beyond legal battles, Pump.fun’s platform functionalities have also ignited debate. In November 2024, it introduced a live streaming function intended to boost user participation.
Nevertheless, there were swiftly accounts of users misusing the function to transmit unsettling and graphic content, encompassing violent content and images involving children and animals. Following extensive disapproval from the cryptocurrency sphere, intense resistance compelled Pump.fun to discontinue the function.
Notwithstanding mounting legal and image-related hurdles, Pump.fun continues to amass substantial earnings. As of January 31, information from Dune Analytics indicates that the platform’s cumulative revenue approximates $500 million, with almost $47 million accumulated in the preceding week alone.
