Class action proposal against Pump.fun: all memecoin are unregistered securities

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Yesterday, the memecoin launch platform Pump.fun was hit by a class action proposal, in which it is accused of violating US securities laws.

The legal action requests that all coins passing through the protocol be labeled as unregistered securities, in addition to compensation for the investors who were harmed.

The accusation goes directly to the company that manages Pump.fun and its founders, all aged between 21 and 23, responsible for earning 500 million dollars in fees by violating the Securities Act.

Let’s see all the details below.

Pump.fun accused of facilitating the exchange of unregistered securities through the sale of memecoin

Yesterday, the U.S. law firm Wolf Popper LLP and the plaintiff Diego Aguilar filed a class action proposal in a federal court in New York against Pump.fun and its memecoins.

The dispute sees the token generation platform being accused of having facilitated the trading of unregistered securities with the SEC.

In particular, the class action proposal, which still needs to be recognized by a judge, reproaches the protocol for having collected 500 million dollars without complying with the federal Securities Act of 1933.

The UK company Baton Corporation, which manages Pump.fun, and its three co-founders are being sued.

It’s interesting to note how the executives of the world’s most famous memecoin platform, the COO Alon Cohen, the CTO Dylan Kerler, and the CEO Noah Tweedale, are all under 23 years old.

Aquilar, who filed the lawsuit, claims to have lost money on Pump.fun by trading 3 memecoins: FWOG, FRED, and GRIFFAIN.

Despite the platform not directly creating any of the tokens at the center of the case, the documentation accuses the company of “orchestrating this scheme.”

This refers to the implicit responsibility of Pump.fun in providing users with automated tools to create and sell unregistered security tokens that are worthless.

The protocol would have acted as a legal issuer and seller, controlling the technical infrastructure, the liquidity, the prices, and the promotion of the token.

Aguilar stated in this regard that:

“The main function of Pump.Fun is to work alongside influencers to co-issue and market unregistered securities. Inherent in its operations is a new evolution in Ponzi schemes and pump-and-dump”.

Now the class action proposal seeks compensation in the form of revocation of all token purchases, monetary damages for the affected investors, and legal expenses.

Pump.fun and memecoin at the center of controversies

It is not the first time that Pump.fun receives legal attacks of this kind.

Just 2 weeks ago, the same law firm Wolf Popper LLP filed another class action against the memecoin creation platform.

This time the main complainant is not Baton Corporation but is still accused of having played a role in the launch of the security token Peanut the Squirrel (PNUT).

Questo memecoin avrebbe raggiunto una capitalizzazione di mercato superiore a 1 miliardo di dollari, senza mai essere stata registrata presso la SEC.

In mid-January, the U.S. law firm Burwick Law had called for a case similar to the ongoing one, where there was talk of “unfulfilled promises” and losses caused by memecoin.

In that context, Pump.fun was accused of having earned hundreds of millions of dollars while on the livestream of its site, scenes of poor taste were published.

There is talk of episodes of drug consumption, self-harm, racism, antisemitism, obscene acts, and other atrocities.

Last March, however, the authority of financial regulation in the United Kingdom issued a warning against the platform, banning its use in the country.

The ongoing controversies surrounding Pump.fun are fueled by the enormous number of memecoins that have passed through the protocol within a year.

Clearly, the more tokens are launched, the higher the potential cases of rugpull and losses for investors, sometimes even with products with high market capitalizations.

Consider that up to today on Pump.fun over 6.8 million memecoins have been created, with an average of more than 50,000 tokens per day since January 1, 2025.

Interesting to observe how the law firms Wolf Popper LLP and Burwick Law, in addition to having attacked Pump.fun, have initiated another class action against the influencer Hailey Welch for illegally promoting the HAWK token.

The giant revenues of the platform

As mentioned, Pump.fun has earned a staggering amount in terms of trading fees on its memecoins, despite being founded just in March 2024.

According to Dune Analytics data, so far the platform has collected fees of over 502 million dollars, most of which from October 2024 onwards.

In Q4 of last year and in January 2025, there was a real boom in activity, driven by growing optimism and hype for memecoin.

In November, the success of Donald Trump in the USA elections contributed to fueling that climate of confidence towards speculations of high-risk cryptographic products.

From that moment on, Pump.fun has almost never earned less than 2 million dollars in fees on any single day.

There have even been cases where revenue of 15 million dollars was recorded in a single daily trading session.

Source: https://dune.com/jhackworth/pumpfun

In parallel, in recent months, the number of active addresses on the platforms has also increased, as well as the number of new users.

In December, the platform reached the record of over 260,000 addresses involved in memecoin trading, of which about 160,000 had never participated before.

The numbers are still very high compared to the pre-boom period, even while observing a slight decrease in new users, a sign that the frenzy might start to wane.

We will see to what extent Pump.fun will continue to be a protagonist in the world of digital dApps and if it will encounter new legal obstacles under the new Trump administration.