Pump.Fun Hit With 3rd Lawsuit as Legal Troubles Mount

Meme coin launchpad, Pump.Fun just got served another class-action suit, alleging that its business model represents an evolved form of Ponzi and pump-and-dump schemes, extracting nearly half a billion dollars in fees from investors. The lawsuit, was filed by a law firm that has also filed suits against Pump.Fun on behalf of two other memecoins, PNUT and HAWK.

The lawsuit alleges that Pump.Fun failed to meet crucial investor protections, such as: Know Your
Customer (KYC) verification; Anti-Money Laundering (AML) compliance; age verification requirements; and risk disclosures trading limits or other protective mechanisms. The suit also claims that the platform facilitated manipulative practices by providing tools and infrastructure for rapid token creation, promotion, and trading.

The lawsuit specifically points to three memecoins that Pump.Fun allegedly promoted through misleading marketing campaigns: the First Convicted Raccoon Token, the FWOG Token, and the GRIFFAIN Token through systematic campaigns and actions that were designed to drive speculative investment.

These campaigns included regular social media posts combined with claims about record-breaking market capitalization achievement, and were designed to create profit expectations among potential investors.

Pump.Fun’s Past Controversies Resurface

The suit also names UK-based firm Baton Corporation/ who maintained centralized control over the marketing, exchange listings, and market activities for the First Convicted Raccoon Token, the FWOG Token, and the GRIFFAIN Token.

The memecoin generatorr has been fraught wih controversy since its launch in April 2024. One of its disgruntled ex employee allegedly embezzled approximately 12.3K SOL, worth $2 million by exploiting smart contracts. The lawsuit against Pump.Fun comes amid another high-profile incident involving the platform.

After receiving a pardon from President Trump, Silk Road founder Ross Ulbricht reportedly lost $12 million on PumpFun coins after accidentally initializing a liquidity pool on the Raydium decentralized exchange at the wrong price.

Pump.Fun Hit With 3rd Lawsuit as Legal Troubles Mount 3

Ross Ulbricht, or someone with access to his wallets, just accidentally nuked the price of a pumpfun coin sent to him while trying to provide liquidity on Raydium. Because he initialized the liquidity pool at the wrong price, $1.5M of the token (5% supply) was instantly taken by a MEV Bot, then sold into the existing pool. Then he did it again and he lost another $10.5M. (35% supply)

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