Pumpfun hit with federal lawsuit over alleged $500M pump-and-dump scheme

Pump.fun faces a lawsuit for allegedly running a $500 million pump-and-dump scheme with unregistered securities. The platform is accused of exploiting users through deceptive marketing and a lack of investor protections.

Pump.fun Under Fire

According to a recent court filing, a user named Diego Aguilar is leading a class action lawsuit against Pump.fun, its parent company Baton Corporation Limited, and its founders. The lawsuit claims they were running an elaborate pump-and-dump operation that raked in close to half a billion dollars in fees. Basically, they’re accused of selling unregistered securities – think of it like selling stocks without following the proper rules – and then using hype to artificially inflate the price before dumping their holdings for a profit, leaving everyone else with losses. The source indicated that Pump.fun hasn’t yet publicly responded to these allegations.

Aguilar, represented by Burwick Law, says he lost money investing in tokens like FRED, FWOG, and GRIFFAIN on the platform. He alleges Pump.fun partnered with influencers to push these tokens hard, creating a false sense of legitimacy. The lawsuit states that Pump.fun used a standardized system for all the meme coins launched on its platform, with a special pricing method based on demand, which made them all behave like unregulated securities. This structure was designed to make each token have identical speculative qualities, further solidifying the claim they were securities under federal law. It’s like they created a cookie-cutter approach to pump-and-dump schemes, the lawsuit suggests.

More Than Just Bad Investments

It gets worse. The filing argues that Pump.fun didn’t have basic protections for investors in place, such as verifying who users were (KYC) and making sure money wasn’t being laundered (AML). It also claims the platform allowed kids to invest without any oversight. And here’s another kicker: The source explained that Pump.fun allegedly hosted tokens promoting some pretty awful content, including antisemitism and racism, alongside explicit materials.

See also  Uniswap Labs Launches $15.5 Million Bug Bounty Program for v4.

The lawsuit goes on to detail how Pump.fun supposedly promoted tokens like FRED, FWOG, and GRIFFAIN through coordinated influencer campaigns and listings on exchanges. The source revealed the platform marketed these tokens as investment opportunities, creating an environment where investors were enticed by hype without understanding the risks involved. It’s definitely a situation worth keeping an eye on, since it could have some serious implications for how meme coins and similar platforms are regulated in the future. The lawsuit is seeking a jury trial, which means this story is far from over.

Source: Tech | Bitcoinethereumnews.com

Please follow and like us:
Pin Share
Join Our Telegram Group

Join Our Telegram Group for the Latest Crypto News!

Stay ahead in the cryptocurrency market with timely updates, exclusive insights, and expert analysis. Join our Telegram group now and never miss out on important market movements!

Join Now

More From Author

Grayscale Debuts New Dogecoin Trust—And Files to Convert It Into ETF

Tether and Lightning Labs Partner to Bring USDT to Bitcoin’s Base Layer

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletter!

Top 10 Cryptocurrencies

Top 10 Cryptocurrencies

# Name Price 24h %

Top Gainers & Losers

Top 5 Gainers (24h)
Loading gainers...
Failed to load gainers. Please try again later.
Top 5 Losers (24h)
Loading losers...
Failed to load losers. Please try again later.