Pump.fun Faces Possible Lawsuit Over Allegations of Investor Harm

A US law firm has revealed plans to take legal action against Solana-based meme coin launchpad Pump.fun on behalf of investors, citing months of questionable promotional activities by platform users.

New York-based Burwick Law, which recently filed a federal lawsuit against the creators of the ill-fated Hawk Tuah meme coin, made its announcement on X on Wednesday.

“In the past few months, pumpdotfun has collected hundreds of millions of dollars in fees while illicit drug use, self-harm, racism, antisemitism, lewd acts, bestiality, violent and other antisocial acts were displayed on the platform,” the law firm alleged.

The firm has called on individuals impacted by Pump.fun’s practices to come forward and contribute to a potential legal case to seek restitution.

Its announcement follows months of collaboration with individuals who, Burwick said, are seeking remediation after losing “significant amounts of money to meme coins, rugs, and unfulfilled promises.”

Burwick claims these issues raise serious questions about the lack of accountability from the platform’s “anonymous” creators.

It is worth noting that the announcement is considered “attorney advertising” where “no outcomes guaranteed” alongside the caveat that “past results do not guarantee future results,” Burwick said.

Pump.fun’s troubled legacy

Since its launch in January 2024, Pump.fun has been a dominant force in the meme coin sector, responsible for the creation of over 6 million tokens, as per Dune Analytics data.

While it promoted itself as a gateway for users without technical expertise to launch tokens, the platform soon became synonymous with speculative trading and risky behavior.

Pump.fun attracted criticism for its now-suspended livestreaming feature, where users performed extreme stunts to promote their tokens. 

This included acts that pushed ethical boundaries and cruelty, such as animal abuse and a faked suicide. 

Meanwhile, the UK Financial Conduct Authority banned its residents from accessing the platform in December, citing risks to investors.

Despite its success in generating revenue, Pump.fun has come under fire for cultivating a system where a privileged few thrive while others are left to bear the brunt of financial ruin.

Data shows that only 0.4% of wallets on the platform have realized profits exceeding $10,000, casting doubt on its fairness to everyday users.

Pump.fun has not yet responded to Decrypt's request for comment.

Edited by Sebastian Sinclair