Pump.fun, a Solana-based token launch platform, is facing a federal class action lawsuit alleging it orchestrated an extensive scheme to issue and promote unregistered securities, violating US securities laws, according to a Jan. 30 court filing.
Diego Aguilar, a Pump.fun user, filed the lawsuit in the U.S. District Court for the Southern District of New York against Baton Corporation Limited — the entity behind Pump.fun — and its founders, Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale.
Aguilar, represented by Burwick Law, claims the platform facilitated a systematic pump-and-dump scheme, extracting nearly $500 million in fees by promoting and selling unregistered securities.
Pump.fun has yet to issue a public response to the lawsuit.
Fraud allegations
The lawsuit alleges Pump.fun functioned as a hub for unregistered securities sales, partnering with influencers to drive speculative interest in its tokens.
Aguilar, who suffered losses from investing in FRED, FWOG, and GRIFFAIN, claims the platform employed aggressive marketing tactics to create the illusion of legitimacy while operating what the lawsuit describes as an “evolution of Ponzi and pump-and-dump schemes.”
According to court documents, Pump.fun used a standardized token infrastructure across all memecoins launched on its platform, including a proprietary bonding curve mechanism that determined token pricing based on demand.
The filing argues this structure ensured that all tokens had identical speculative characteristics, making them unregistered securities under federal law.
The lawsuit also states that Pump.fun omitted basic investor protections such as Know Your Customer verification and anti-money laundering protocols, allowing minors to invest in speculative assets without oversight. Additionally, it alleges the platform was used to launch tokens promoting antisemitism, racism, and explicit content.
Seeking jury trial
The lawsuit details how Pump.fun allegedly promoted FRED, FWOG, and GRIFFAIN as investment opportunities through coordinated influencer campaigns and exchange listings.
It claims the platform marketed FRED with high-quality artwork and aggressive promotion, securing multiple exchange listings and a significant social media presence.
Meanwhile, FWOG was presented as a competitor to other successful memecoins, using social media hype to drive trading volume, while GRIFFAIN was positioned as part of an AI-powered trading system — allegedly promoted with misleading claims of automated profit generation.
Each token’s value was heavily dependent on Pump.fun’s marketing, exchange listings, and community engagement, factors the lawsuit argues establish them as securities under the Howey Test.
This lawsuit marks the third legal action against Pump.fun in recent months. The company has previously been sued over its role in launching the PNUT and HAWK tokens.
The case raises broader questions about the legality of token launchpads and their liability in facilitating speculative investments. Aguilar and his attorneys are seeking a jury trial to pursue damages and further regulatory scrutiny of Pump.fun’s business model.
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