The platform Pump.fun, which specializes in the creation of memecoins, is facing a proposed class-action lawsuit that claims every token it has facilitated constitutes an unregistered security. The suit was initiated by Diego Aguilar in a federal court in New York, alleging that the platform generated approximately $500 million in fees by exploiting retail investors.
The lawsuit asserts that Pump.fun, purportedly managed by the Baton Corporation based in the UK, employed aggressive marketing tactics to create a fabricated sense of urgency around volatile tokens. This led to significant financial losses for individual investors, who were drawn into a risky investment environment. The claim argues that the platform predominantly operates in a manner akin to evolved Ponzi and pump-and-dump schemes by collaborating with influencers.
Additionally, the complaint identifies several individuals — Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale — as officers of Baton Corporation, naming them as defendants alongside the platform itself. Aguilar, who claims to have purchased multiple tokens from Pump.fun, is not only targeting the tokens he acquired but also all tokens produced on the site, which he categorizes as “unregistered security memecoins.”
The lawsuit points to potential violations of the Securities Act, demanding rescission of all token purchases, financial compensation for the investors involved, and the recovery of legal expenses. Attempts to reach representatives from Pump.fun and Baton Corporation for comment have been unsuccessful.
Transformations within the legal landscape are emerging, as a separate law firm had already highlighted issues of investor losses attributable to memecoin rug pulls linked to Pump.fun. The platform recently experienced a surge in usage, surpassing $3.3 billion in weekly trading volume, coinciding with the introduction of memecoins associated with the Trump family.
