The popular Solana-based launchpad Pump.fun is under fire again after a law firm filed a class-action lawsuit against the platform on behalf of investors who lost money on memecoins popularized by Pump.fun. The lawsuit says the platform sells unregistered securities, promotes pump-and-dump schemes, and lacks proper user protections.
Solana pump. Great fun with a class action lawsuit
Over the past year, Pump.fun has cemented its position as the most popular coin launcher following its massive success, which was simultaneously fueled by the memecoin craze this cycle. However, he stole the limelight this time after Burwick Law initiated legal action against the platform.
On Wednesday, a law firm Announce On
Burwick Law announces legal action against Pump.fun, Source: Burwick Law on X
The Solana-based platform was launched on January 19, 2024, and became a sensation in the market for simplifying the creation and deployment of meme currencies. Its massive success led to the platform surpassing Ethereum and most Solana protocols in fees and revenue during the third quarter of 2024 and seeing a record daily revenue of $15 million on January 1, 2025.
However, Pump.fun’s year was also like that controversialUsers have repeatedly criticized the platform for allegedly allowing malicious behavior and “ruining” the memecoin market. The law firm noted the recent controversy sparked by the launch pad, saying:
“In the past few months, Pumpdotfun has collected hundreds of millions of dollars in fees while illicit drug use, self-harm, racism, anti-Semitism, lewdness, bestiality, violence and other anti-social acts have been displayed on the platform. The creator of this platform has chosen not to Revealing his identity, he acknowledged the importance of transparency in retail expansion and participation, which raises serious concerns about accountability.
like I mentioned By Bitcoinist The Solana-based platform came under fire in November for its live streaming chaos. Many Pump.fun users streamed malicious and violent content using the platform’s live streaming feature to go viral and pump their tokens.
The “trend” appears to have started when a 12-year-old trader launched memecoin and tried to attract investors during a Pump.fun live stream. As a result, users created several memes using controversial claims to pump their tokens.
Eventually, the platform acknowledged the situation and shut down the live streaming feature indefinitely to “ensure absolute safety” for users.
“A new development in Ponzi and pump and dump schemes”?
The law firm filed a class action lawsuit complaint v. Patton Ltd., a British entity, and the three founders of the platform, Alon Cohen, Dylan Kerler, and Noah Bernhard Hugh Twedal.
The complaint, filed in the Southern District of New York on Thursday, alleges that Pump.fun was offering and selling unregistered securities. Peanut the Squirrel (PNUT) is an unregistered security, making its sale a violation of securities law, the lawsuit says.
Class Action Complaint. Source: Cdn
Notably, the sole plaintiff, Kendall Carnahan, claims he only lost $231 from purchasing the Solana memecoin, but is seeking to file the complaint on behalf of other affected users.
Furthermore, the lawsuit alleges that Pump.fun’s operations are a “new development in Ponzi and pump-and-dump schemes,” which allowed minors to transact in unregistered securities of minors.
In addition to Pump.Fun’s unique marketing techniques, the platform allows minors to issue and purchase unregistered securities.
The plaintiff also alleges that Solana overlooked basic investor protection measures, including “know your customer” procedures and anti-money laundering protocols, and failed to disclose risks to users.
“This is exemplified by the ease with which anyone, regardless of age, can create an account and purchase a token in less than 5 minutes,” the court document said.
She received mixed news answer From the crypto community. Some Pump.fun users have confirmed that they will join the lawsuit, while other community members have stated that it is “not realistic to expect anything” from it.
Solana (SOL) trades at $221 in the one-week chart. Source: SOLUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com