Pump.fun faces lawsuit over $398M earnings: Details here

• Burwick Law plans legal action against Pump.fun over alleged dubious promotions.
• Pump.fun dominates memecoin launches on Solana, generating $398M amid growing legal scrutiny.

A prominent New York-based law firm, Burwick Law, has announced its intention to pursue legal action against Pump.fun, a Solana [SOL]-based memecoin launchpad, on behalf of aggrieved investors.

The platform has come under scrutiny for allegedly engaging in months of dubious promotional practices.

Burwick Law’s latest legal move

Known for its recent federal lawsuit against the creators of the ill-fated Hawk Tuah memecoin, Burwick Law revealed its latest move via a post on X (formerly Twitter).

 The law firm alleged,

“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.”

What’s more

Meanwhile, according to analyst Adam Tehc’s Dune dashboard, the platform recorded a staggering weekly trading volume of $2.2 billion. However, a detailed report showed a stark disparity in profitability among users.

Of the 14 million wallet addresses on Pump.fun, only 57,144 users have realized profits exceeding $10,000. Moreover, a mere 298 wallets—around 0.00217%—have amassed gains of over $1 million.

Remarking on the same, Tehc highlighted,

“If you’ve realized $10,000 trading Pump.fun’s tokens, you’re a top 0.412% wallet.”

For context, profits are considered realized only after traders have sold their assets.

The journey of Pump.fun

That being said, since its debut in January 2024, Pump.fun has emerged as a powerhouse in the meme coin landscape. According to Dune Analytics, it is reportedly responsible for creating over 6 million tokens.

Initially marketed as a user-friendly platform for launching tokens without technical expertise, it soon gained popularity for fostering speculative trading and controversial behaviors.

Yet, the platform faced significant backlash for its now-suspended livestreaming feature. This allegedly encouraged users to engage in unethical acts, including staged suicides and animal cruelty, to promote their tokens.

The way forward

As the Solana ecosystem thrives, Pump.fun has emerged as a pivotal player, commanding significant attention and dominance within the memecoin sector.

With revenues surpassing $398 million and accounting for over 70% of new token launches on certain days, the platform’s influence is undeniable.

Interestingly, the legal proceedings against Pump.fun coincide with a broader resurgence in the memecoin market. Solana’s DeFi activity was nearing an all-time high of $9 billion in TVL.

Despite the controversy, Pump.fun’s rapid revenue growth, including a 207% surge in November alone, underscores its role in shaping the Solana-based memecoin ecosystem.