USDUS Law Firm Burwick Law to Sue Pump.fun Over Investor Losses from Memecoin Launchpad
Pump.fun Faces Legal and Ethical Reckoning
Pump.fun, a Solana-based memecoin launchpad, has come under intense scrutiny as U.S.-based law firm Burwick Law prepares to file a lawsuit against the platform. Since its launch in January 2024, Pump.fun has amassed $398 million in revenue, including a staggering 207% revenue surge in November alone. However, this rapid success is marred by allegations of unethical content, investor losses, and disproportionate profitability favoring a small minority of users.
Burwick Law alleges that Pump.fun has allowed the proliferation of harmful and antisocial content, including displays of illicit drug use, self-harm, racism, antisemitism, and even bestiality. The firm represents investors who claim to have suffered significant losses due to speculative trades, rug pulls, and unfulfilled promises. Addressing these issues, Burwick Law emphasized the vulnerability of memecoin investors to manipulation, stating that such schemes differ fundamentally from regulated gambling.
The disparity in earnings highlights the platform’s skewed profitability. Of the 14 million wallets associated with Pump.fun, only 57,144 wallets earned over $10,000, while a mere 298 wallets surpassed $1 million in profits, representing just 0.00217% of users. Analyst Adam Tehc pointed out the glaring imbalance, noting, “If you’ve realized $10,000 trading Pump.fun’s tokens, you’re a top 0.412% wallet.” This concentration of gains underscores a troubling inequity within the ecosystem, leaving the majority of users at a loss.
Despite these criticisms, Pump.fun has had a significant impact on the Solana network, facilitating the creation of over 6 million tokens and, at its peak, driving 70% of Solana’s new daily token launches. Weekly trading volumes reached an impressive $2.2 billion, solidifying its position as a major force in the memecoin market.
However, the platform's November 2024 introduction of a livestreaming feature drew widespread condemnation when users misused it to promote tokens through staged suicides, animal cruelty, and other dangerous acts. The feature has since been suspended, with Pump.fun pledging to implement stricter moderation.
The controversies surrounding Pump.fun have drawn regulatory attention as well. In December 2024, the UK Financial Conduct Authority banned the platform in a bid to protect investors from scams. Adding to the criticism, prominent crypto investigator ZachXBT dismissed the lawsuit as misplaced, arguing that users willingly gambling on micro-cap meme coins should not be considered victims. Nonetheless, Burwick Law contends that the exploitation of unsuspecting investors represents a distinct form of manipulation that warrants legal redress.
Compounding the concerns is the anonymity of Pump.fun’s creator, known only by the pseudonym “Alon.” Burwick Law has criticized this lack of transparency, citing it as a major accountability issue. The firm underscored that while the creator acknowledges transparency’s importance in scaling retail engagement, their continued anonymity raises significant red flags.
Pump.fun’s rise aligns with Solana’s surging DeFi activity, which peaked at nearly $9 billion in total value locked (TVL). The launchpad’s prominence mirrors the broader resurgence of the memecoin market, cementing its role in a speculative trading niche. However, critics argue that its practices represent a misuse of crypto’s potential. As Burwick Law remarked, “Instead of fulfilling crypto’s potential, this focus has led to an ecosystem that hides behind crypto buzzwords to exploit everyday people.”
This article has been refined and enhanced by ChatGPT.
