A well-known legal firm based in New York, Burwick Law, has announced its plans to take legal action against Pump.fun, a launchpad for memecoins based on Solana [SOL], representing disgruntled investors.
The platform is facing allegations of participating in questionable promotional activities over several months.
Legal Action by Burwick Law Firm
Burwick Law, recognized for its recent lawsuit against the founders of the ill-fated Hawk Tuah memecoin, disclosed its latest legal move through a post on X (formerly known as Twitter).
The law firm claimed,
“Pumpdotfun has reportedly raked in hundreds of millions of dollars in fees while allowing various inappropriate behaviors such as drug use, self-harm, racism, antisemitism, lewd acts, bestiality, violence, and other antisocial activities on the platform.”
Further Insights
Moreover, as per the analysis by Adam Tehc’s Dune dashboard, Pump.fun recorded a remarkable weekly trading volume of $2.2 billion. However, a detailed report indicated a significant gap in profitability among users.
Out of 14 million wallet addresses on Pump.fun, only 57,144 users have reported profits exceeding $10,000. Additionally, merely 298 wallets, constituting around 0.00217%, have accumulated gains exceeding $1 million.
Addressing this, Tehc pointed out,
“Being in the top 0.412% of wallets requires realizing $10,000 in profits from trading Pump.fun tokens.”
It should be noted that profits are recognized only when traders sell their assets.
Pump.fun’s Evolution
Notably, since its launch in January 2024, Pump.fun has established itself as a prominent player in the meme coin sector. According to Dune Analytics, it has reportedly created over 6 million tokens.
Initially promoted as a user-friendly platform for launching tokens without the need for technical knowledge, it quickly gained recognition for facilitating speculative trading and controversial conduct.
However, the platform received significant criticism for its now-suspended live streaming feature, which allegedly encouraged users to partake in unethical practices, such as staged suicides and animal abuse, to promote their tokens.
The Future Ahead
As the Solana ecosystem flourishes, Pump.fun has emerged as a key influencer, commanding substantial attention and dominance in the meme coin realm.
With revenues exceeding $398 million and contributing to over 70% of new token launches on specific days, the platform’s impact is undeniable.
Interestingly, the legal actions against Pump.fun come amidst a broader resurgence in the meme coin market, with Solana’s DeFi activity reaching nearly $9 billion in TVL.
Despite the controversies, Pump.fun’s rapid revenue growth, including a notable 207% spike in earnings during November, highlights its significant role in shaping the Solana-based meme coin ecosystem.