Compiled by: Felix, PANews

On January 16, the New York-based cryptocurrency law firm Burwick announced that it will take legal action against Pump.fun on behalf of investors who suffered losses on the meme coin issuance platform. It is alleged that the platform charged exorbitant fees while allowing various forms of harmful content to be published.

Burwick stated that this move was made after "months" of discussions with affected users who lost "substantial amounts of money" due to unfulfilled promises related to memecoins, rug pulls, and platforms like Pump.fun.

The law firm accused: "In the past few months, Pump.fun has charged hundreds of millions of dollars in fees, while the platform is rife with antisocial behaviors such as illegal drug use, self-harm, racism, anti-Semitism, obscenity, and violence. Although the platform's creators acknowledge the importance of transparency in promotion and retail participation, they have chosen to remain anonymous, raising serious public concerns about the creators' lack of accountability."

The law firm is calling for victims harmed by Pump.fun to participate in a potential legal lawsuit to seek compensation. The firm has provided a way to possibly recover at least some funds, allowing any affected users to fill out a form and contact Burwick.

It is worth noting that Burwick stated this announcement is considered "lawyer advertising," "does not guarantee results," and includes the disclaimer that "past results do not guarantee future results."

Pump.fun's "Dark History" Continues

According to Dune Analytics data, since its launch in January 2024, Pump.fun has been a dominant force in the meme coin space, with users issuing over 6 million tokens on its platform.

Although 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 has also faced widespread criticism for its now-suspended live streaming feature. The live streaming function was launched in May last year and sparked a "live streaming meme" craze in November. However, due to inadequate content moderation, users displayed dangerous and extreme content during live streams, such as animal abuse and fake suicides.

Additionally, in the weeks leading up to Burwick's lawsuit, a public opinion poll released by journalist Jack Kubinec (involving 42 founders) showed that the majority of project founders in the Solana ecosystem expressed disdain for Pump.fun. In other words, this market hype coexists with a poor reputation. However, Burwick is not the first entity to initiate legal action against Pump.fun.

In early December 2024, under pressure and stern warnings from the UK's FCA, Pump.fun ceased its operations in the UK. Before this ban was implemented, the London police investigated a scammer on the Pump.fun platform who claimed that the platform was engaged in large-scale fraud.

Pump.fun Founders Profit, Most Users Lose Money?

From a financial perspective, the Pump.fun team's profit progress seems to be "smooth." According to Lookonchain's statistics on January 14 data, Pump.fun has deposited 1,785,278 SOL (worth $359 million) into Kraken and sold 264,373 SOL for $41.64 million. Pump.fun has earned a total of 2,241,890 SOL (worth $410 million).

In stark contrast, most users have not "benefited." Data compiled by a statistician on Dune shows that most Pump.fun traders have not realized profits exceeding $10,000; among a total of 13,547,736 Pump.fun wallet addresses, only about 55,296 addresses (0.408%) have achieved profits over $10,000.

Although the Pump.fun founders later denied this profit data, claiming that many of the total addresses were bots and AI agents, and that unrealized profits were not considered, as well as not accounting for tokens purchased that were already bound to Raydium. However, the "fact" that most players are facing "losses" seems to have already become a "conclusion."

Related: In-depth Analysis of Pump.fun: How the Meme Coin Casino Operates?

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