Pump.fun Faces Second Lawsuit Alleging Fraudulent Activities and Securities Violations

The woes for Pump.fun, the platform that allows the launch of meme coins on Solana, keep piling. A second lawsuit has been filed against the platform

A second lawsuit has been filed against Pump.fun, a platform that enables the launch of meme coins on Solana, alleging fraudulent activities and violations of US securities laws.

This development adds to the increasing scrutiny faced by meme coin projects, particularly those accused of being pump-and-dump schemes.

The class-action complaint, filed by Burwick Law and Wolf Popper LLP, alleges that Pump.fun has been offering unregistered securities in the guise of meme coins.

According to the complaint, the company misled investors into purchasing the tokens, which had little to no intrinsic value, while insiders profited at their expense.

The complaint raises a host of regulatory questions regarding meme coin platforms and whether or not they fall under the jurisdiction of securities laws.

Burwick Law and @WolfPopperLLP have filed a second federal class action lawsuit on behalf of investors against the PumpdotFun platform.

Full complaint available below.

The legal team behind the lawsuit argues that Pump.fun’s operations resemble classic financial fraud tactics.

By allowing the rapid creation and trading of meme coins, the platform may have facilitated schemes where early investors benefit at the cost of later entrants.

This lawsuit follows a previous legal action that targeted Pump.fun for similar reasons, indicating a pattern of legal challenges for the platform.

Regulators and legal experts are closely following the development of the situation, with some drawing comparisons between the given platform’s model and multi-level marketing scams.

Founder of Burwick Law, Max Burwick, has been outspoken regarding the risks involved in meme coin platforms, stating that they fall within a gray area where upcoming enforcement will be much strict.

With impending legal announcements, I want to make my personal position on the exploitation of memecoins widely available.

The crypto market aims to reduce illegal financial activities, so platforms like Pump.fun may face a lot of pressure to follow current laws.

Moreover, investor protection groups have been seeking clearer rules about meme coins and their status and classification under securities law.

If Pump.fun is found guilty of selling unregistered securities, it could set a standard for other crypto sites.

The Hype or Market Manipulation of Meme Coin

This lawsuit also highlights a broader discussion about meme coins.

While some view them as the lighter, fun aspects of the crypto market, others see them as a tool for mass manipulation in the markets.

Meme coins are typically known for their rapid rises and falls, leading to massive losses for late investors, with critics arguing that platforms like Pump.fun thrive on artificial hype rather than value.