Class action lawsuit has been brought against a crypto investor pump.funAfter suffering trading losses, a platform to launch and invest in meme-inspired cryptocurrencies.
The two firms representing the plaintiffs are Wolf Popper and Berwick Law separate class action In December investors flocked to Memecoin, launched by web personality Haley Welch, better known as the Hawk Tuh Girl, who value declined Immediately after the start of trading. (Welch was not named as a defendant in that suit.)
“These ‘emperor’s new clothes’ crypto schemes cannot masquerade 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 underlying purpose beyond speculation – instantly and at no cost. The new lawsuit, filed Thursday in the Southern District of New York, alleges that Pump.Fun acted as an unregistered securities issuer and seller. The complaint alleges that by making marketing claims that minimize the chances of losing money trading Memecoin, the platform also put investors at financial risk.
Separately, the lawsuit alleges that these memecoin platforms like Pump.Fun are designed in such a way as to encourage pump-and-dump activity. The complaint claims, “Early investors or insiders artificially inflated token prices through coordinated purchasing and promotional campaigns, then sold their stakes at extreme prices, causing the value of the tokens to fall and subsequent investors to lose money.” It causes a lot of damage.”
The complaint points to the circumstances surrounding the launch of a particular Pump.Fun memecoin – PNUT – which references the celebrity squirrel euthanized in New York last year to prove its claims.
Pump.Fun did not immediately respond to a request for comment. But in an interview with WIRED last year, Noah Twedale, one of three Pump.Fun co-founders named in the lawsuit, refuted the idea that the platform profits from regular investors losing money. “The idea with Pump was to create something where everyone is on the same playing field,” Tweedale said. “I want to emphasize that we do not want people to waste money on our platform. “It doesn’t benefit us in any way.”
more than this 6 million unique memecoins Launched via Pump.Fun the most successful of which Their value is millions of dollars. The memecoin market cap now totals over $100 billion, market data Shows.
In its first 12 months of operation, Pump.Fun is Reported by third parties Generated more than $350 million in revenue with a 1 percent cut in trades. The platform is on pace to generate more than $1 billion in revenue in 2025.
However, the lawsuit brought by the crypto investor – which follows reports of unethical business activity, Criticism relating to content moderation, and a alert The order issued against Pump.Fun by the UK financial regulator could threaten to impact its rapid growth.
The lawsuit hinges on the idea that Memecoins should be classified as securities, a special type of investment instrument, under certain circumstances. 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 made investors liable to regulated entities. Necessary disclosures were denied.