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A proposed class-action suit alleged all crypto tokens on Pump.fun are “unregistered security memecoins” that earned the platform nearly $500 million.
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Solana memecoin creation platform Pump.fun was hit with a proposed class-action suit alleging every token it helped make is an unregistered security from which it made nearly $500 million in fees.
The suit filed by Diego Aguilar in a New York federal court on Jan. 30 claimed that Pump.fun, allegedly run by the UK-based Baton Corporation, used guerilla marketing to generate artificial urgency for “highly volatile” tokens, which resulted in retail investors suffering significant losses.
“Pump.Fun’s core function is to work alongside influencers to co-issue and market unregistered securities. Inherent to its operations are a novel evolution in Ponzi and pump-and-dump schemes,” it claimed.
The complaint also names Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, all of who are listed as Baton Corporation’s officers on UK Companies House.
Screenshot from the class-action lawsuit. Source: Courtlistener
Aguilar claimed he purchased a number of memecoins from Pump.fun but his suit targets all of the tokens on the platform, which are named “unregistered security memecoins.”
The lawsuit alleged Pump.fun functioned as an issuer and statutory seller, controlling the token’s technical infrastructure, liquidity, pricing and promotion.
The lawsuit alleges violations of the Securities Act and seeks relief in the form of rescission of all token purchases, monetary damages for affected investors, and litigation costs.
Pump.fun and Baton could not be reached for comment. Information on the defendants’ lawyers was not immediately available.
Related: Trump memecoins boost ‘crypto’ Google searches to 3-year high
In mid-January, US law firm Burwick Law stated that it was taking legal action against Pump.fun, claiming investors had suffered losses from memecoin rug pulls and “unfulfilled promises.”
“In the past few months, Pump.fun has collected hundreds of millions of dollars in fees while illicit drug use, self-harm, racism, antisemitism, lewd acts, bestiality, violent and other antisocial acts were displayed on the platform,” it stated.
Pump.fun usage surged over the past week when it recorded an all-time high of $3.3 billion in weekly trading volume following the launch of Trump family memecoins.
Magazine: Influencers shilling memecoin scams face severe legal consequences
This article first appeared at Cointelegraph.com News
