Pump.fun Faces Class Action Lawsuit Over Alleged Unregistered Securities Sales
A class action lawsuit claims that Pump.fun, a Solana-based meme coin platform, operated an illegal securities exchange, allowing creators to launch over 50,000 unregistered tokens. Filed in New York's Southern District Court, the lawsuit alleges that Baton Corporation, Pump.fun's U.K.-based parent company, collected nearly $500 million through a 1% fee on every transaction. The complaint revolves around three tokens: First Convicted Raccoon (FRED), FWOG, and GRIFFAIN, which reportedly qualify as securities under the Howey Test—a legal criterion for investment contracts. The suit alleges central control over token creation via standardized tools and pricing. Executives Tweedale and Cohen are under scrutiny for profiting from these securities offerings. Following the lawsuit, Pump.fun's daily revenue has dropped significantly, and the platform has faced previous controversies, including hosting inappropriate content. Baton Corporation has until February 20 to respond to the allegations.
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