They went after crypto promoters Hawk Tuah. Now they are suing Pump.Fun

A crypto investor filed a class action lawsuit against Pump. Entertainmentplatform to launch and invest in meme-inspired cryptocurrencies after suffering trading losses.

The plaintiffs are represented by Wolf Popper and Burwick Law, the two firms working with a separate class action brought in by investors in December for a memecoin launched by web personality Haley Welch, better known as Hawk Tua Girl, who collapsed in value soon after the start of trading. (Welch was not named as a defendant in that suit.)

“These ’emperor’s new clothes’ crypto schemes cannot continue to masquerade as legitimate finance, leaving the vulnerable in the lurch,” said Max Burwick, founding partner at Burwick Law.

Pump.Fun was a hit when it launched in January 2024, giving people a way to float memecoins—highly volatile cryptocurrencies that typically have no intrinsic purpose beyond speculation—instantly and for free. The new lawsuit, filed Thursday in the Southern District of New York, alleges that Pump.Fun operated as an unregistered issuer and seller of securities. By making marketing claims that downplay the likelihood of losing money when trading memecoins, the complaint alleges, the platform also exposes investors to increased financial risk.

Separately, the lawsuit alleges that these memecoin platforms, such as Pump.Fun, are designed in such a way as to encourage pump and dump activity. “Early investors or insiders artificially inflate token prices through coordinated purchases and promotional campaigns, then sell their holdings at peak prices, causing the token’s value to crash and leaving later investors with significant losses,” the complaint alleges.

The complaint cites the circumstances surrounding the launch of a particular Pump.Fun memecoin — PNUT, which references the famous squirrel euthanized last year in New York to prove 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 co-founders of Pump.Fun named in the lawsuit, refuted the idea that the platform could be taking advantage of regular investors who were losing money. “The idea with Pump was to build something where everyone was on the same playing field,” Tweedale said. “I want to emphasize 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 memecoins are launched via Pump.Fun, the the most successful of which are valued at hundreds of millions of dollars. The memecoin market now totals over $100 billion, market data shows.

During the first 12 months of operation, Pump.Fun is reported by third parties to have generated more than $350 million in revenue, with a 1% reduction in deals. The platform is on track to make more than $1 billion in revenue in 2025.

However, the lawsuit filed by the crypto investor, which follows reports of unethical business activity, criticism related to content moderation and a warning issued against Pump.Fun by the UK financial regulator—could threaten to slow rampant growth.

The lawsuit is based on the idea that memecoins should, under certain circumstances, be classified as securities, a certain type of investment vehicle. The complaint alleges that by failing to register token sales with the Securities and Exchange Commission (SEC), the relevant US financial regulator, Pump.Fun violated securities laws and denied investors disclosures required by regulated entities.