A class action lawsuit has been brought against a crypto investor pump.funA platform to launch and invest in meme-inspired cryptocurrencies, after suffering trading losses.
Representing the plaintiffs are Wolf Popper and Burwick Law, two firms that a Separate class action Brought in December by investors on a memecoin launched by web personality Hayley Welch, known as Hawk Tua Girl, which Collapsed in value Immediately after trading commences. (Welch was not named as a defendant in that suit.)
“These ’emperor’s new clothes’ crypto schemes cannot continue to be disguised as legitimate finance, leaving vulnerable people in the lurch,” says Max Berwick, founding partner of Berwick Law.
Pump.Fun was a hit when it launched in January 2024, giving people a way to launch memecoins—highly volatile cryptocurrencies that typically have no ulterior motive other than speculation—instantly and without of value The new lawsuit, filed Thursday in the Southern District of New York, alleges that Pump.Fun acted as an unregistered securities issuer and seller. In making marketing claims that minimize the chance of losing money trading memecoins, the complaint alleges, the platform also exposed investors to high financial risk.
Separately, the lawsuit alleges that memecoin platforms, such as Pump.Fun, are designed in such a way as to encourage pump-and-dump activity. “Early investors or insiders artificially inflate token prices through purchase and promotion campaigns, then sell their holdings at peak prices, causing the token price to fall and subsequent investors to suffer significant losses. ,” the complaint claims.
The complaint points to the circumstances surrounding the launch of a particular Pump.Fun memecoin—PNUT, which references the famous squirrel in New York last year—to substantiate its claims.
Pump.Fun did not immediately respond to a request for comment. But in an interview with WIRED last year, Noah Tweedale, one of three Pump.Fun co-founders named in the suit, disputed the idea that the platform benefits regular investors from losing money. “The idea with Pump was to create something where everyone was on the same playing field,” Tweedale said. “I want to emphasize, we don’t want people to lose money on our platform. It does not benefit us in any way.”
more than 6 million unique memecoins Launched by Pump.Fun The most successful of which Worth millions of dollars. The memecoin market is now worth more than $100 billion in total, Market data shows
In its first 12 months in operation, Pump.Fun is Reported by third parties Generated more than $350 million in revenue, cutting 1 percent of the business. The platform is on pace to earn over $1 billion in 2025.
However, lawsuits brought by crypto investors – which follow reports Unethical business activity, Criticism Related to material handling, and a warning issued against Pump.Fun by the UK’s financial regulator—could threaten to curtail runaway growth.
The lawsuit hinges on the idea that in certain circumstances memecoins should be classified as securities, a specific type of investment instrument. The complaint claims that by failing to register the token sale with the Securities and Exchange Commission (SEC), the relevant US financial regulator, Pump.Fun allegedly violated securities laws and misrepresented investors to regulatory bodies. Denied the required disclosure of
