They went after cryptocurrency promoter Hawk Tuah. Now they’re suing Pump.Fun

A cryptocurrency investor has filed a class action lawsuit against him Pump.Funa platform for launching and investing in meme-inspired cryptocurrencies, after suffering trading losses.

The plaintiffs are represented by Wolf Popper and Borwick Law, the two firms handling the case Separate class work brought in by investors in December regarding the memecoin launched by web personality Haley Welch, known as the Hawk Tuah Girl, who It collapsed in value Shortly after the start of trading. (Welch is not named as a defendant in that lawsuit.)

“These ‘Emperor’s New Clothes’ cryptocurrency schemes cannot continue to masquerade as legitimate finance, leaving vulnerable people in the lurch,” says Max Burwick, founding partner at Burwick Law.

Pump.Fun was a huge success when it launched in January 2024, giving people a way to unlock memcoins — highly volatile cryptocurrencies that typically have no inherent 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 issuer and seller of securities. By making marketing claims that reduce the likelihood of losing money trading memecoins, the complaint alleges that the platform also exposes investors to increased financial risks.

Separately, the lawsuit alleges that these memecoin platforms, such as Pump.Fun, are designed in a way that stimulates pumping and dumping activity. “Initial investors or insiders artificially inflate token prices through coordinated buying and promotion campaigns, then sell their holdings at peak prices, causing the value of the token to collapse and leaving subsequent investors with significant losses,” the complaint alleges.

The complaint cites the circumstances surrounding the launch of a particular Pump.Fun memecoin — PNUT, which refers to the famous squirrel that was euthanized last year in New York — to substantiate its claims.

Pump.Fun did not immediately respond to a request for comment. But in an interview with WIRED last year, Noah Tweedale, one of the three Pump.Fun founders named in the lawsuit, refuted the idea that the platform would profit from regular investors losing money. “The idea with Pump was to build something where everyone was on the same playing field,” says Tudell. “I want to stress that we do not want people to lose money on our platform. This does not benefit us in any way.”

more than 6 million unique meme coins Launched by Pump.Fun, The most successful ones Its value is estimated at hundreds of millions of dollars. The memecoin market is now worth over $100 billion in total, Market data He appears.

In its first 12 months of operation, Pump.Fun has been around Reported by third parties It generated revenues of more than $350 million, with a 1 percent discount on trades. The platform is on track to generate revenues of more than $1 billion in 2025.

However, the lawsuit filed by cryptocurrency investors – which came after reports… Unethical business activity, cash Related to content moderation, and a warning issued against Pump.Fun by the UK’s financial regulator – could threaten to dampen runaway growth.

The lawsuit is based on the idea that meme coins should in some circumstances be classified as securities, a specific type of investment vehicle. The complaint alleges that by failing to register token sales with the Securities and Exchange Commission (SEC), the relevant U.S. financial regulator, Pump.Fun allegedly violated securities laws and deprived investors of required disclosures from regulated entities.