Pump.Fun Sued for Securities Violations

The suit was filed in the Southern District of New York (SDNY) on Thursday. It claims the platform earned nearly $500 million in fees.

It alleges Pump.Fun enabled users to create and sell memecoins that should be classified as securities.

Lawsuit Challenges Pump.Fun’s Role in Token Issuance

At the heart of the lawsuit is a major question that has long dogged the crypto industry: When is a token considered a security? The plaintiffs argue that all tokens generated on Pump.Fun’s platform falls under U.S. securities laws, making the company liable. However, this issue remains far from settled, especially as the U.S. SEC under the new Trump administration is reworking its approach to crypto regulation.

The lead plaintiff, Diego Aguilar, claims he lost money trading three Pump.Fun-created tokens—FWOG, FRED, and GRIFFAIN. The lawsuit accuses Pump.Fun of orchestrating a scheme by providing automated tools that allow users to launch and sell “nearly worthless digital tokens” within minutes. As a result, the suit alleges that Pump.Fun should be considered a “joint issuer” of every token launched on its platform, making it responsible for compliance with securities laws.

The suit names U.K.-registered Baton Corporation as the operator of Pump.Fun and identifies three of its co-founders: COO Alon Cohen, CTO Dylan Kerler, and CEO Noah Tweedale. When asked for comment, Cohen declined to speak on behalf of the company. The other executives could not be reached at the time of publication.

Pump.Fun Faces Multiple Legal Battles

This isn’t Pump.Fun’s first legal rodeo. Just two weeks ago, the same law firm, Wolf Popper LLP, filed a separate class action suit against the company over the PNUT token, a Solana-based memecoin inspired by Peanut the Squirrel. That token reportedly hit a $1 billion market cap before tumbling 89% from its peak.

As the SEC works to establish a clear regulatory framework for the crypto industry. Cases like this could set the stage for future rulings. A ruling for the plaintiffs could spark more lawsuits against memecoin platforms.

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