A new lawsuit accuses Pump.fun of selling unregistered securities through its memecoin creation platform on the Solana blockchain. The lawsuit claims that every token created on the platform is an unregistered security and that Pump.fun has earned nearly $500 million in fees from these tokens.
Pump.fun Accused of Running a Ponzi-Like Scheme
On Jan. 30, Diego Aguilar filed a class-action lawsuit in a New York federal court. He alleges that Pump.fun, allegedly run by the UK-based Baton Corporation, used aggressive marketing tactics to manipulate investors. Aguilar claims that Pump.fun created artificial urgency around highly volatile memecoins, leading to major financial losses for retail investors.
The lawsuit states that Pump.fun worked with influencers to promote unregistered securities. It claims that the platform deliberately inflated token prices before allowing them to collapse, a tactic commonly known as a pump-and-dump scam. Aguilar argues that the platform operated like a Ponzi scheme, luring investors with promises of quick profits while profiting from losses.
Aguilar did not limit his lawsuit to the memecoins he bought. He argues that every token launched on the platform qualifies as an unregistered security.
The lawsuit also names Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, who serve as officers of Baton Corporation, as additional defendants.
The Platform Allegedly Controlled Token Prices and Marketing
The lawsuit states that Pump.fun did not merely act as a platform but directly controlled the memecoin market. It claims that the company managed liquidity, set prices, and handled marketing, making it a statutory seller under securities laws. Aguilar argues that this level of control proves Pump.fun actively participated in selling unregistered securities.
Aguilar demands that the court cancel all token purchases made through Pump.fun. He also seeks financial compensation for affected investors and wants the platform to pay all legal fees and litigation costs.
Burwick Law Previously Warned of Legal Action Against Pump.fun
This lawsuit comes after another legal challenge from Burwick Law, a U.S. law firm that announced in mid-January that it was preparing legal action against Pump.fun. Burwick Law claims investors have lost money due to rug pulls and broken promises made by memecoin creators using the platform. The firm alleges that Pump.fun has failed to protect investors from fraudulent token launches and misleading marketing.
Burwick Law has also made serious accusations regarding the content allowed on the platform. The law firm claims that the platform has been used to promote inappropriate and harmful material, including references to drug use, self-harm, racism, and violent acts. It argues that Pump.fun has failed to moderate this type of content while continuing to collect millions of dollars in fees.
Pump.fun Trading Volume Surges Despite Legal Troubles
Despite these legal challenges, Pump.fun has experienced a surge in trading activity. The platform recently reached an all-time high of $3.3 billion in weekly trading volume. A portion of this growth has been linked to the launch of Trump family-themed memecoins, which attracted high speculation and trading interest.
Pump.fun and Baton Corporation have not responded to the lawsuit. There is also no public information available regarding legal representatives for the defendants.
