Pump.fun was sued by a US law firm, users suffered losses, and other founders of the Solana ecosystem were disgusted
Compiled by: Felix, PANews
On January 16, New York-based cryptocurrency law firm Burwick announced that it would take legal action against Pump.fun on behalf of investors who lost money on the meme coin distribution platform, which allegedly allowed all forms of harmful content while charging huge fees.
Burwick said the move came after "months" of consultation with aggrieved users who lost "significant amounts of money" to unfulfilled promises on platforms such as memecoin, Rug pulls and Pump.fun.
The law firm alleged: "Over the past few months, Pump.fun has collected hundreds of millions of dollars in fees, while the platform is rife with antisocial behaviors such as illegal drug use, self-harm, racism, anti-Semitism, obscenity, violence, etc. Although the platform creator recognizes the importance of transparency in promotion and retail investor participation, the platform creator still chooses to remain anonymous, raising serious public doubts about the creator's lack of responsibility."
The law firm is calling on victims of Pump.fun to participate in possible legal action to seek compensation. The law firm has provided a way to potentially recover at least some of their funds. Any user who lost money can fill out a form and get in touch with Burwick.
Notably, Burwick said this statement is considered “attorney advertising,” “results are not guaranteed,” and comes with the caveat that “past results do not guarantee future results.”
Pump.fun's "dark history" continues
According to Dune Analytics data , Pump.fun has been a dominant force in the meme coin space since its launch in January 2024, with users on its platform issuing over 6 million tokens.
Although Pump.fun billed itself as a gateway to issuing tokens for users without technical expertise, the platform quickly became synonymous with speculative trading and risky behavior.
Pump.fun has also been widely criticized for its now-suspended live streaming feature. Pump.fun launched the live streaming feature in May last year and set off a "live streaming with memes" craze in November. However, due to poor content review, users appeared in the live streaming and performed dangerous and extreme content, such as animal abuse and fake suicide.
In addition, a poll published by journalist Jack Kubinec a few weeks before Burwick filed the lawsuit showed that most founders of projects in the Solana ecosystem expressed disgust with Pump.fun (42 founders). In other words, this market hype coexists with a bad reputation. However, Burwick is not the first entity to initiate legal action against Pump.fun.
In early December 2024, under pressure and severe warnings from the UK FCA, Pump.fun terminated its UK operations. Prior to the implementation of this ban, the London police investigated a scammer on the Pump.fun platform who claimed that the platform was carrying out large-scale fraud.
The founder of Pump.fun makes money, but most users lose money?
From a financial perspective, the Pump.fun team's money-making progress seems to be "smooth." According to Lookonchain statistics on January 14, Pump.fun has deposited 1,785,278 SOL ($359 million) to Kraken and sold 264,373 SOL for 41.64 million USDC. Pump.fun has earned a total of 2,241,890 SOL ($410 million).
In stark contrast, most users have not "benefited". Data compiled by a statistician on Dune shows that most Pump.fun traders have not yet realized a profit of more than $10,000. Among the total 13,547,736 Pump.fun wallet addresses, only about 55,296 addresses (0.408%) have realized a profit of more than $10,000.
Although the founder of Pump.fun later denied the revenue data, saying that most of its total addresses were robots and AI agents, and did not take into account unrealized profits and token purchases that were bound to Raydium. However, the "fact" that most players are facing "losing money" seems to have been "concluded" long ago.
Related reading: In-depth analysis of Pump.fun: How does the Memecoin casino work?
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