Pump.fun faces lawsuits over alleged $500M meme coin fraud
This is the second lawsuit in two weeks
In the latest lawsuit, filed on January 30 by law firms Burwick Law and Wolf Popper LLP on behalf of investor Diego Aguilar, the plaintiffs allege violations of U.S. securities laws, claiming that securities were sold disguised as meme tokens.
According to court documents, Aguilar claims financial losses after purchasing multiple tokens on the platform, including Fwog Fwog, which Pump.fun promoted as having a $500 million market cap. However, CoinMarketCap currently values the project at less than $95 million after a 64% price drop last month.
The lawsuit, filed in the Southern District of New York, names several defendants, including Baton Corporation Ltd (operating as Pump.fun) and key figures Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Twidale.
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Massive legal attack on memecoin platform
Previously, on January 16, Burwick Law filed another lawsuit against Pump.fun on behalf of client Kendall Carnahan, citing losses from purchasing the Peanut the Squirrel meme coin.
The lawsuit alleges that Pump.fun collaborates with influencers to issue and sell unregistered securities. It also claims that the platform’s business model is an advanced Ponzi and Pump-and-Dump scheme, extracting nearly half a billion dollars in fees from investors.
Burwick Law founder and partner Max Burwick criticized platforms like Pump.fun, calling them “the highest evolution of multi-level marketing scams that prey on human desperation and the digital attention economy.”
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His firm has since urged investors who lost money due to fraudulent and misleading promises to take action against such platforms, launching a website to assist affected clients.
As we wrote, Solana-based memecoin platform Pump.fun has experienced a dramatic revenue drop following its decision to disable a controversial livestream feature. The platform, which allows users to launch and trade memecoins, generated $33.83 million in weekly revenue during November’s peak before plunging to $11.31 million in the subsequent week, a 66% decline, according to DefiLlama data.
