4 hours ago
The suit alleges that Pump.fun has made astir $500 cardinal successful fees from helping users make memecoins.
Jan 30, 2025, 9:36 p.m. UTC
Memecoin generator Pump.fun was deed with different proposed people enactment lawsuit connected Thursday, accusing the institution and its executives of raking successful astir $500 cardinal successful fees portion violating U.S. securities laws.
The suit, filed successful the Southern District of New York (SDNY), hinges connected the crypto industry’s biggest lingering question — when is simply a token a security? Though the suit alleges that each token created utilizing Pump.fun’s level is simply a security, and frankincense taxable to U.S. securities laws, that’s acold from a substance of settled law. Under the caller Donald Trump Administration, the U.S. Securities and Exchange Commission (SEC) has indicated it's changing tack connected crypto regulation, creating a caller crypto task force charged with establishing a wide regulatory model for the industry.
The pb plaintiff successful Thursday's suit, Diego Aguilar, claimed to person mislaid wealth trading 3 Pump.fun-created memecoins successful peculiar — FWOG, FRED and GRIFFAIN. Though Pump.fun does not itself make immoderate of the tokens covered successful the suit, the filing accuses the institution of “orchestrat[ing] this strategy by providing automated tools that let anyone to make and merchantability astir worthless integer Tokens successful minutes” and frankincense qualifies arsenic a “joint issuer” of each tokens launched connected its platform.
Aguillar’s suit names a U.K.-registered institution called Baton Corporation, which it alleges is the relation of Pump.fun, arsenic good arsenic 3 of the company’s co-founders — COO Alon Cohen, CTO Dylan Kerler and CEO Noah Tweedale. Cohen declined to comment, telling CoinDesk that helium was speaking for himself and not the company. The different members of the squad could not beryllium reached by property time.
The instrumentality steadfast that filed the suit, New York-based Wolf Popper LLP, filed different people enactment suit against Pump.fun conscionable 2 weeks ago. That suit, filed connected Jan. 16, has a antithetic pb plaintiff but likewise accuses Baton Corporation and its 3 co-founders of selling an unregistered information — the PNUT token, a Solana-based memecoin inspired by Peanut the Squirrel, which the suit claims reached a $1 cardinal marketplace capitalization. At the clip of publication, the PNUT token is down 89% from its precocious of $2.25 past November.
Wolf Popper LLP, on with crypto litigation-focused steadfast Burwick Law, is besides down the caller class enactment suit filed against the promoters of the HAWK token, a memecoin tied to influencer Hailey Welch, a.k.a. Hawk Tuah.
Though Pump.fun lone launched a twelvemonth ago, the Solana-based memecoin mill is nary alien to controversy. Last March, the U.K fiscal regulator issued a informing against the platform, starring Pump.fun to prohibition U.K.-based users. It besides came nether occurrence for its now-disable livestream feature, which allowed immoderate users to beforehand their tokens with convulsive oregon intersexual content.
Read more: Crypto Gets Shock Video Does arsenic Users Stream NSFW Content to Pump Their Memecoins
The suit is seeking damages and attorneys’ fees.
Danny Nelson contributed reporting.
Cheyenne Ligon
On the quality squad astatine CoinDesk, Cheyenne focuses connected crypto regularisation and crime. Cheyenne is primitively from Houston, Texas. She studied governmental subject astatine Tulane University successful Louisiana. In December 2021, she graduated from CUNY's Craig Newmark Graduate School of Journalism, wherever she focused connected concern and economics reporting. She has nary important crypto holdings.
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