Pump.fun, the Solana-based crypto platform, was hit with a class action lawsuit on Friday. The company and its executives have been accused of opening investors to high-risk financial investments and luring nearly $500 million in fees by allowing the issuing and marketing of unregistered and volatile meme coins, flouting United States securities law.
According to a filing submitted by the plaintiff Diego Aguilar, the platform is accused of relying on an evolution of pump-and-dump schemes. The lawsuit begs the question of when a token should be considered a security, with the plaintiff arguing that all the tokens on the pump.fun are Securities. He mentioned that since that has been established, they must be consistent with the United States Securities laws.
Plaintiff takes pump.fun to court after losing money to meme coins
According to the plaintiff, he took the initiative after losing money to investments in tokens like FRED, GRIFFAIN, and FWOG. He mentioned that the tokens were created on the pump.fun despite the company not being responsible for their creation. He mentioned that the company provided the tools to the people who created the tokens, one which they could do in minutes and without any technical know-how. He noted that as a result of that, the company qualifies as a joint issuer of the tokens.
Aguilar names Baton Corp, alongside some of the company’s executives as the defendants in the lawsuit. However, none of the executives have responded to the lawsuit. The lawsuit is coming after Pump.fun was sued for selling unregistered securities. While both the cases were filed in the Wolf Popper LLP law firm, the plaintiffs are entirely different. The law firm is also working with Burwick Law, the company offering litigation in a class action related to the Hawk Utah meme coin.
SEC may soon make changes to crypto regulation
With Donald Trump assuming the office of the President in the United States, the crypto landscape is already undergoing slight changes. The SEC has been charged with creating a clear and comprehensive framework to regulate cryptocurrencies. Commissioner Hester Peirce has been charged with leading the task force, with the known crypto advocate working to create better regulation with help from society.
The team will also support Congress as it continues to look into the development of crypto policies. The task force will be charged with overseeing which way the crypto regulation will swing under president Donald Trump. While most crypto advocates have bashed the previous SEC boss Gary Gensler, there is hope that the incoming Paul Atkins will benefit the crypto industry. Gensler is known for taking the fight to crypto firms, albeit in an enforcement manner, with his famous victories the hefty fine that Binance paid, and the incarceration of Sam Bankman-Fried.sued