On January 16, New York-based cryptocurrency law firm Burwick announced that it would be taking legal action against Pump.fun on behalf of investors who suffered losses on meme coin distribution platform Pump.fun. The platform allegedly charges large fees while allowing various forms of harmful content to be published.
According to Burwick, the move comes after “months” of negotiations with aggrieved users who lost “significant amounts of money” as a result of unfulfilled promises on platforms such as memecoin, Rug pulls and Pump.fun. fun”.
The law firm alleges that “Pump.fun has collected hundreds of millions of dollars in fees over the past several months while the platform has been rife with illegal drug use, self-harm, racism, anti-Semitism, obscenity, violence, and other anti-social behavior. The platform’s creators have chosen to remain anonymous despite agreeing on the importance of transparency in terms of outreach, and retail participation, raising serious questions in the public eye about the lack of accountability of the creators.”
The law firm is calling on victims victimized by Pump.fun to engage in possible legal action to seek compensation. The law firm is offering a way to potentially recover at least some of their money, and any users who have suffered losses can fill out a form and get in touch with Burwick.
Notably, Burwick says the statement is considered “attorney advertising” and “does not guarantee results” with the caveat that “past results are no guarantee of future results. .
Pump.fun’s “dark history” continues
According to Dune Analytics, Pump.fun has been a dominant force in the meme coin space since its launch in January 2024, with over 6 million tokens issued by users of its platform.
While Pump.fun claims to be a portal for users without technical expertise to issue tokens, the platform quickly became synonymous with speculative trading and risky behavior.
Pump.fun was also widely criticized for its now-suspended live-streaming feature, which went live in May of last year and started the “live with meme” craze in November. However, due to poor content moderation, users were broadcasting dangerous and extreme content, such as animal cruelty and faked suicides.
In addition, a poll published by journalist Jack Kubinec a few weeks before Burwick’s lawsuit showed that a majority of founders of projects in the Solana ecosystem (42 founders) expressed distaste for Pump.fun. In other words, this marketing hype goes hand in hand with a bad reputation. However, Burwick is not the first entity to initiate legal action against Pump.fun.
In early December 2024, Pump.fun terminated its U.K. operations after pressure and stern warnings from the FCA. Prior to the ban, the London police investigated a scammer on the Pump.fun platform who claimed that the platform was committing large-scale fraud.
Pump.fun founders making money, most users losing money?
From a financial perspective, it looks like everything is “going well” for the Pump.fun team in terms of making money. According to Lookonchain’s January 14th statistics, Pump.fun has deposited 1,785,278 SOL ($359 million) with Kraken and sold 264,373 SOL at a price of 41.64 million USDC. In total, Pump.fun has earned 2,241,890 SOL ($410 million).
In stark contrast, the majority of users have not “benefited”. According to one of the statisticians on Dune, the majority of Pump.fun traders have yet to realize a profit of more than $10,000, with only about 55,296 addresses (0.40%) out of a total of 13,547,736 Pump.fun wallet addresses. 296 addresses (0.408%) out of a total of 13,547,736 Pump.fun wallet addresses have realized over $10,000 in profits.
Although Pump.fun’s founders later denied this profit figure in a post, claiming that their total address count included bots and AI agents, did not take into account unrealized profits, and did not account for token purchases that were tied to Raydium. However, the “fact” that the majority of players are “losing money” seems to be a “foregone conclusion”.
