Pump.fun Sued by Burwick Law and Wolf Popper LLP Over Alleged Fraudulent Memecoin Launchpad Activities

Pump.fun, the popular memecoin Launchpad, has been sued by cryptocurrency law firm Burwick Law and securities law firm Wolf Popper LLP

A federal class action lawsuit has been filed on behalf of crypto investors against Pump.fun, a memecoin launchpad that has been accused of displaying "racist, anti-Semitic, torture, and sexual content on its homepage."

The lawsuit, filed by cryptocurrency law firm Burwick Law and securities law firm Wolf Popper LLP, alleges that Pump.fun exploited the hopes of crypto investors by offering unregistered and highly risky securities, while also engaging in illegal practices that included collecting hundreds of millions in fees from customers that may have included minors.

"We are proud to represent crypto investors and enthusiasts in seeking accountability and advocating for the responsible advancement of blockchain technology," Burwick Law said in a statement Thursday.

The lawsuit specifically mentions Peanut the Squirrel (PNUT), a token that became popular during the 2024 U.S. elections, and alleges that it is a security under securities laws but no registration documents were ever filed with the U.S. Securities and Exchange Commission (SEC) to make it eligible for sale.

The lawsuit accuses Pump.fun's operations of being "a novel evolution in Ponzi and pump and dump schemes," and alleges that the platform's "guerilla marketing" tactics revolved around a business that promoted child abuse, racism, self-harm, potentially minor p***ography, anti-Semitism, and violence.

It also alleges that Pump.fun failed to provide basic investor protections, such as Know-Your-Customer (KYC) systems and anti-money laundering protocols, and did not have the proper risk disclosures or other protective mechanisms to limit investors' losses.

The lawsuit also mentions the Solana blockchain, which has played a role in the rise of memecoins. According to the legal complaint, the "effects of the Defendants' unlawful conduct were felt in this District by investors who transacted in memecoins through Solana's New York-based blockchain network."

"A substantial portion of the conduct and transactions that constituted the securities laws violations occurred, among other places, through the Defendans' use of the Solana blockchain network," the lawsuit states.

The PNUT token is a Solana-based memecoin, and the lawsuit includes images that it alleges show inappropriate activity on the platform, including the brandishing of firearms by a "serial livestreamer on Pump.fun who is known from multiple pump & dump schemes."

Pump and dump is a phrase used widely in the crypto space to describe token activity where a memecoin developer or team promotes the token aggressively to boost a token's price artificially. Once prices are up, they sell their holdings in large batches, leaving smaller investors with significant losses as the coin's price plunges.

Burwick Law also tagged Donald Trump-appointed crypto and AI czar David Sacks, New York Attorney General Tish James, and former Florida Attorney General Pam Bondi "to raise awareness about the broader issues facing crypto investors nationwide."

Pump.fun has yet to release an official statement regarding the lawsuit.