Pump.fun, a memecoin launchpad based on Solana, has come under fire after extracting $741 million in fees from its users. The platform, which allows the creation and trading of memecoins, is facing intense criticism over its operations.
Critics claim that Pump.fun has become a “disease,” responsible for scams and harmful behavior, including incidents of suicides and extreme actions streamed on the platform.
Crypto influencer Crypto Bitlord has been one of the leading voices condemning Pump.fun, estimating that over $20 billion has been taken through scams on the platform. Bitlord has called for the platform to be removed from the internet, stating that its closure would benefit the entire crypto ecosystem.
Pump.fun’s Controversial Practices
The backlash intensified when Pump.fun’s official account and its co-founder, Alon Cohen, were suspended on the social media platform X. This suspension has raised further questions about the platform’s operations, especially as Pump.fun reportedly plans a $1 billion token sale, with a $4 billion valuation.
Blockchain analytics firm LookOnChain has revealed that Pump.fun has been converting its fee revenue into Solana (SOL) tokens. Since May 2024, the platform has sold about 4.1 million SOL tokens, which amounted to $741 million.
Of this, 3.84 million SOL, worth $699 million, was deposited into Kraken exchange. An additional 264,373 SOL, valued at $41.64 million, was converted into USDC.
Financial Impact on Users
Despite these large revenue numbers, the platform’s user base has seen poor returns. Data shows that 99.6% of traders on Pump.fun have failed to make more than $10,000 in profit. Only 293 wallets out of the 13.55 million active addresses have earned more than $1 million. This highlights a stark contrast between the platform’s profits and the losses faced by most users.
Pump.fun’s issues extend beyond its financial practices. The platform’s livestreaming feature has been linked to disturbing content. In November 2024, it suspended its livestream feature after users began broadcasting extreme behavior intended to manipulate token prices. This content was reported to have included threats of self-harm and violence.
Although the platform promised to improve its moderation, it reintroduced livestreaming to 5% of users in April 2025. Unfortunately, it failed to deliver on its promise to enhance content control. This has raised significant concerns about the platform’s ability to safeguard its users.
Business Model and Memecoin Concerns
Pump.fun has quickly become a major player in the Solana ecosystem since its launch in January 2024. The platform processes over $66 billion in cumulative trading volume and launches about 27,305 tokens daily. Despite this success, its fee structure and business model have been met with harsh criticism.
The platform charges a 0.25% fee on every trade, which has led to accusations of exploiting its users. Additionally, a new revenue-sharing model directs 0.05% of trading fees to token creators. Critics argue this structure rewards malicious developers who abandon their projects after the initial launch, a practice known as “rug pulling.”
Legal Issues and Regulatory Pressure
Pump.fun faces legal and regulatory challenges as well. The platform is currently being sued for selling unregistered securities disguised as meme tokens. The platform is also under scrutiny for promoting highly volatile financial products to retail investors.
Recent actions by X, including the suspension of Pump.fun’s accounts suggest that regulatory pressure is mounting. It is unclear whether this suspension is linked to violations of platform policies or potential legal violations, such as unauthorized API usage or SEC investigations.
However, the timing of this suspension is critical for Pump.fun as it plans its $1 billion token sale. The platform relies heavily on social media for user engagement and token promotion, making this suspension a serious setback.
Conclusion
Pump.fun is at a crossroads. The platform has faced mounting criticism over its fees, content moderation failures, and questionable business practices. It has also become a target for legal action due to its role in facilitating scams and promoting high-risk financial products. The platform’s upcoming $1 billion token sale may now be in jeopardy as it grapples with growing regulatory scrutiny and public backlash.
The future of Pump.fun depends on whether it can address these concerns and regain the trust of its users and the broader crypto community. If it fails to address these issues, the platform may face further legal challenges and potential closure.
Frequently Asked Questions (FAQ)
1. What is Pump.fun?
Pump.fun is a Solana-based platform that enables users to trade and launch memecoins, with a primary focus on creating meme tokens.
2. How much revenue has Pump.fun generated in fees?
Pump.fun has generated $741 million in fees by selling Solana (SOL) tokens.
3. What are the concerns surrounding Pump.fun?
Critics are concerned about the platform’s high fees, lack of proper content moderation, and its role in facilitating scams and harmful behavior.
4. What is a “rug pull”?
A “rug pull” occurs when developers abandon their project after an initial launch, leaving investors with worthless tokens.
Appendix: Glossary of Key Terms
Memecoin: A type of cryptocurrency created as a joke or for fun, often without serious financial backing or purpose.
Pump.fun: A Solana-based memecoin launchpad platform that allows users to trade and create tokens.
Rug Pull: A scam where developers abandon a project after launching it, leaving investors with worthless tokens.
Live-streaming Feature: A feature on Pump.fun allowing users to broadcast content, which has been linked to harmful and extreme behavior.
Taker Buy Dominance: A market metric showing dominance of buyers lifting offers in the market, often indicating a bullish trend.
Unregistered Securities: Financial products offered without proper registration with regulatory authorities, such as the SEC.
Reference
CryptoNews – cryptonews.com
