They went after Hawk Tuah crypto promoters. Now they are suing the pump. fun

A class action lawsuit has been filed against a crypto investor Pump. FunAfter suffering trading losses, a platform for launching and investing in meme-inspired cryptocurrencies.

The plaintiffs are represented by Wolf Popper and Berwick Law, two firms operating one each Separate class action Investors brought in December a memecoin launched by web personality Haley Welch, better known as Hawk Tuah Girl, which The standard is broken Immediately after the start of trading. (Welch was not named as a defendant in that case.)

“These ’emperor’s new clothes’ cannot keep crypto schemes masquerading as legitimate money, leaving the vulnerable vulnerable,” said Max Berwick, founding partner of Berwick Law.

Pump.Fun was a hit when it launched in January 2024, giving people a way to launch memecoins—the highly volatile cryptocurrency that usually has no ulterior motive beyond speculation—instantly and at no cost. The new lawsuit, filed Thursday in the Southern District of New York, alleges that Pump.Fun acted as an unregistered securities issuer and seller. Marketing claims that money trading MemeCoin reduces the chance of loss, the complaint alleges, the platform also exposes investors to higher financial risk.

Separately, the lawsuit alleges that these memecoin platforms, such as Pump.Fun, are designed to encourage pump-and-dump activity. “Early investors or insiders artificially inflated the token’s value through coordinated purchases and promotional campaigns, then sold their holdings at the highest price, causing the token’s value to collapse and subsequent investors to suffer substantial losses,” the complaint claims.

The complaint alludes to the circumstances surrounding the launch of a certain Pump.Fun memecoin—PNUT, which refers to celebrity squirrels euthanized in New York last year to substantiate claims.

Pump.Fun did not immediately respond to a request for comment. But in an interview with WIRED last year, Noah Tweedle, the three named in the suit, pumped. Phan, one of the co-founders, refuted the idea that the platform regularly benefits from investors losing money. “The idea with Pump was to create something where everyone was on the same playing field,” Tweedle said. “I want to emphasize, we don’t want people to lose money on our platform. It does not benefit us in any way.”

More than that 6 million unique memecoins Powered by Pump.Fun The most successful of which are worth hundreds of millions of dollars. The memecoin market is now worth more than $100 billion in total. Market data shows

In its first 12 months of operation, Pump.Fun is Reported by a third party Generated more than $350 million in revenue, accounting for 1 percent of sales. The platform is on pace to reach over $1 billion in revenue by 2025.

However, reports of lawsuits brought by crypto investors follow Unethical trading activities, Criticism Regarding content moderation, and a warning Issued against Pump.Fun by the UK financial regulator – could threaten to put a dampener on runaway growth.

The lawsuit hinges on the idea that memecoins should be classified as securities in some circumstances, a special type of investment instrument. The complaint claims that by failing to register the token sale 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