- Burwick Law pursues legal action against Pump.fun for alleged investor exploitation.
- Pump.fun accused of collecting millions amid allegations of harmful content and scams.
- Only 0.4% of Pump.fun users reportedly profited, raising concerns over platform practices.
Burwick Law, a New York-based firm, has announced legal action against Solana memecoin launchpad Pump.fun. The firm claims that it is representing investors who lost significant sums of money due to scams, rug pulls, and unfulfilled promises associated with the platform. Burwick described Pump.fun as a platform that exploits everyday investors by using deceptive tactics and crypto buzzwords to avoid accountability.
The law firm alleges that Pump.fun pocketed “hundreds of millions” in fees while fostering an unsafe environment. Among the allegations are instances of illegal drug use, racism, antisemitism, and self-harm content during the platform’s livestreaming sessions. Due to such cases, Pump.fun decided to stop the live streaming option in November, 2024. Yet, according to Burwick, the founder of the platform who choose to stay unidentified, has not solved the problem systemically. The firm contends that this non-disclosure type is the key source of relevant accountabilities.
Burwick further criticized the memecoin landscape as a whole, claiming it has become dominated by speculative assets that benefit a small group of insiders at the expense of regular investors. Max Burwick, a founding partner of the firm, likened memecoin platforms to casinos where the games are rigged. He stated that these speculative assets are often manipulated through various means, making them different from traditional gambling in the eyes of regulatory definitions.
Pump.fun is a launchpad on the Solana network which allows users to easily create and pump their memecoins even without a programming knowledge. Despite its growing popularity, the platform has faced scrutiny. According to blockchain data from Dune Analytics, only 0.4% of wallets on Pump.fun made profits exceeding $10,000. This highlights the limited success rate for the majority of users. Additionally, the platform generated $80.3 million in revenue in December 2024, down slightly from $93.8 million in November.
Related: https://cryptotale.org/protecting-your-digital-assets-a-guide-to-crypto-security/
The UK’s Financial Conduct Authority (FCA) banned Pump.fun in December, citing its association with scams and fraudulent activity. The platform has yet to respond to the legal claims made by Burwick Law. The firm is now encouraging affected investors to join the lawsuit through an intake form.
Burwick also revealed plans to pursue legal actions related to other crypto ventures, such as NFT projects and tokens that promised unrealistic benefits. These initiatives aim to bring accountability and transparency to the broader crypto industry. As of now, the firm continues to investigate the extent of losses faced by Pump.fun’s users while urging regulators to address the growing number of scams in the crypto space.
