Pump.fun Faces $500M Class-Action Lawsuit Over Memecoins

Pump.fun, a popular memecoin platform, is facing a significant legal challenge with a proposed class-action lawsuit alleging that all tokens created on its platform are unregistered securities. The suit, filed in the Southern District of New York, claims that the platform has generated nearly $500 million in fees by enabling users to launch memecoins.

The lead plaintiff, Diego Aguilar, alleges financial losses from trading Pump.fun-created tokens such as FWOG, FRED, and GRIFFAIN. The lawsuit argues that Pump.fun acts as a "joint issuer" by providing an automated launchpad for memecoins. The suit targets the U.K.-registered Baton Corporation, believed to operate Pump.fun, along with its co-founders.

Burwick Law and Wolf Pepper LLP have jointly filed the lawsuit, accusing Pump.fun of harming investors through memecoin scams and broken promises. The firm has been working with individuals who lost money due to rug pulls and fraud. The lawsuit also criticizes Pump.fun for making hundreds of millions in fees while allowing harmful and offensive content on its platform.

However, a Twitter user known as Apate pointed out that memecoins were explicitly excluded from being classified as securities under the 1987 Securities Exchange Act amendment. Additionally, the SEC lost a similar case in 2019 involving Dogecoin derivatives, suggesting a tough legal road ahead for regulators trying to label memecoins as securities.

This is not the first legal battle for Pump.fun. The same law firm, Wolf Popper LLP, previously sued the company over the PNUT token, which once hit a $1 billion market cap but has since plummeted by 89%. Another suit targeted the HAWK token, associated with influencer Hailey Welch.

Despite the controversy and lawsuits, memecoins have seen massive growth in early 2025. Pump.fun's record transaction volume has surpassed major networks like Solana and Ethereum. In the past month, Pump.fun made $116.72 million in revenue, beating Solana's $116.46 million and Ethereum's $107.64 million. In just 24 hours, trading volume hit $295.53 million, with fees soaring to $1.45 billion