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Pump.fun

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Summary

Pump.fun (operated by Baton Corporation Ltd.) is a Solana-based memecoin launchpad that launched on January 19, 2024, enabling users to create and trade tokens within seconds for a fraction of a cent. Despite generating over $1 billion in cumulative platform revenue by late 2025, the platform faces a consolidated federal class-action lawsuit alleging operation of an unregistered securities exchange, insider exploitation of MEV infrastructure, and a whistleblower-sourced cache of 5,000+ internal messages alleged to show coordinated market manipulation. Third-party research classifies 98.6% of tokens launched on the platform as rug pulls or pump-and-dump schemes, and North Korea's Lazarus Group has been linked by on-chain investigator ZachXBT to laundering attempts through the platform using fake memecoins after the February 2025 Bybit hack.

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Overview and Business Model

Pump.fun was founded by Noah Tweedale, Alon Cohen, and Dylan Kerler, and launched on January 19, 2024. The platform is operated by Baton Corporation Ltd. It allows users to create Solana-based tokens in seconds for under $2 in SOL, with no coding required. The platform charges a 1% swap fee on all trades and earns 1.5 SOL when a token 'graduates' to Raydium DEX after reaching a $90,000 market cap via an automated bonding curve mechanism. By early 2025, over 6 million tokens had been launched on the platform. DeFiLlama data indicates cumulative revenues exceeded $1 billion, with 2024 revenue of approximately $321 million and 2025 revenue of approximately $664 million. The platform captured approximately 80% of Solana memecoin launches at its peak. In July 2025, the company conducted a token offering (PUMP) raising $1.3 billion, comprising $600 million in a public sale and $700 million in a private sale, making it one of the largest crypto ICOs in history.

Sources

Federal Class-Action Lawsuit: Unregistered Securities and MEV Manipulation

On January 30, 2025, a proposed class-action lawsuit (Aguilar v. Baton Corporation Ltd. d/b/a Pump.Fun, Case No. 1:25-cv-00880) was filed in the U.S. District Court for the Southern District of New York. A second related case was filed on January 16, 2025, concerning the $PNUT token. The two cases were consolidated in June 2025 by Judge Colleen McMahon. The consolidated complaint names Pump.fun (Baton Corporation), Solana Labs, the Solana Foundation, Jito Labs, the Jito Foundation, and related executives as defendants. Core allegations include: (1) operating as an unregistered securities exchange; (2) generating approximately $722 million in revenue while allegedly inflicting between $4 billion and $5.5 billion in losses on retail traders; (3) falsely advertising 'fair launch,' 'no presale,' 'no insider allocations,' and 'rug-pull proof' features while allegedly integrating Jito Labs MEV infrastructure that allowed insiders to pay priority fees to front-run ordinary users' transactions via 'Jito bundles.' Plaintiffs allege insiders purchased tokens at low bonding-curve prices before public trades executed, then exited once prices rose. In December 2025, a confidential informant provided plaintiffs' counsel with over 5,000 internal chat messages alleged to show real-time coordination between Solana Labs and Pump.fun engineers on 'integration of key software components.' On December 9, 2025, Judge McMahon granted plaintiffs permission to file a Second Amended Complaint, with a deadline of January 7, 2026. Jito Labs and related parties were dropped from the suit in September 2025 after a motion to dismiss. Pump.fun disputes the characterization in the lawsuit. Wolf Popper LLP is counsel for plaintiffs.

Sources

Insider Exploit by Former Employee (May 2024)

On May 16, 2024, Pump.fun suffered approximately $1.9 million in losses from an exploit carried out by Jarret Dunn (online alias 'STACCoverflow'), a former employee who had been employed by the company for approximately six weeks. Dunn allegedly leveraged his privileged access to withdrawal keys and used flash loans on a Solana lending protocol to drain funds from bonding curve contracts. Rather than retaining the stolen SOL, Dunn publicly admitted the attack on social media and airdropped portions of the funds to random wallet holders. He stated his motive was to 'kill Pump.fun because it's something to do' and claimed the platform had 'inadvertently hurt people.' Dunn was arrested on May 18, 2024 in London and charged with theft from employer for $2 million and conspiracy to steal an additional $80 million. He was released on bail but later jailed in London for a bail breach. As of reporting, he faced a potential sentence of more than seven years. Pump.fun stated it would repay affected users from its own funds.

Sources

Livestream Exploitation and Harmful Content (November 2024)

In November 2024, Pump.fun suspended its platform livestreaming feature following widespread public outcry over harmful content broadcast to viewers. Documented incidents included: a user threatening suicide if their memecoin did not reach a specified market cap; a man pointing a gun at a dog and threatening to shoot it unless his token reached $11 million; a 13-year-old who created a token called 'Gen Z Quant,' promoted it on stream, then sold his position for approximately $50,000 profit at a $1 million market cap; and reports of content involving drug use, explicit material, animal abuse, and self-harm. Blockchain investigator Beau, a Pudgy Penguins safety project manager, flagged an early suicide-threat incident on November 25, 2024, which drew broader attention. Additionally, a trader known as 'MistaFuccYou' allegedly shot himself during a livestream on X after losing $500 on a Pump.fun memecoin rug pull. Pump.fun suspended the feature entirely, then relaunched it in April 2025 with a published moderation policy prohibiting violence, harassment, sexual exploitation, and illegal activity. The feature was initially rolled out to 5% of users before a full restoration.

Sources

Bybit Hack / Lazarus Group Laundering via Pump.fun (February 2025)

On-chain investigator ZachXBT published findings in February 2025 linking wallets associated with the Lazarus Group — the North Korean state-sponsored threat actor attributed to the approximately $1.5 billion Bybit hack of February 2025 — to alleged money laundering activity on Pump.fun. ZachXBT reported that a wallet receiving $1.08 million USDC in funds traceable to the Bybit hack bridged those funds to Solana and that a person laundering for the Lazarus Group had previously launched memecoins via Pump.fun. A specific token named 'QinShihuang' was launched by an alleged Lazarus-linked wallet; within approximately three hours, trading volume exceeded $26 million before Pump.fun blocked the token. ZachXBT traced over 920 addresses receiving funds linked to the Bybit hack. The FBI attributed the Bybit theft to the Lazarus Group and the affiliated TraderTraitor operation. Pump.fun took reactive steps to block the identified wallet activity. Separately, ZachXBT also identified the compromise of Pump.fun's official X account on February 26, 2025, where hackers posted a fraudulent 'PUMP' governance token announcement that briefly reached a $5 million market cap. ZachXBT assessed this X compromise was likely due to a threat actor social-engineering X employees, and was not Pump.fun's fault directly.

Sources

Token Fraud Rate: 98.6% Rug Pull Classification

A report by Solidus Labs, a crypto compliance firm, analyzed tokens launched on Pump.fun between January 2024 and March 2025 and classified 98.6% of those with at least five trades as rug pulls or pump-and-dump schemes. Of over 7 million tokens deployed on the platform, only approximately 97,000 maintained liquidity above $1,000. Separately, research found approximately 93% of liquidity pools on Raydium — the DEX to which Pump.fun tokens graduate — also exhibited pump-and-dump characteristics. Lawsuit filings cite a related statistic: the alleged scheme drove 98.6% of more than 14 million memecoins to collapse to zero. Pump.fun disputed the Solidus Labs report's characterization, arguing that failed tokens are an inherent feature of speculative open-access markets and that the platform does not curate token quality. The bonding curve pricing model has been identified as a structural factor: early buyers and token creators can accumulate tokens at lower prices and exit before broader public participation, a dynamic the consolidated class-action alleges was amplified by MEV front-running tools.

Sources

UK Financial Conduct Authority Warning and User Ban

On December 3, 2024, the UK Financial Conduct Authority (FCA) published a warning stating that Pump.fun 'may be providing or promoting financial services or products without our permission' and that the firm 'may be targeting people in the UK.' The FCA confirmed that Pump.fun is not authorized or registered by the FCA to conduct financial services in the UK. Following the warning, Pump.fun banned all UK users from accessing the platform. Co-founder Alon Cohen confirmed to Decrypt that the UK ban was not temporary and that only the UK was affected at that time. The FCA warning noted that users dealing with unauthorized firms lose access to the Financial Ombudsman Service and Financial Services Compensation Scheme protections. Pump.fun's operation without FCA authorization means UK customers using the platform have no UK regulatory recourse for losses.

Sources

PUMP Token ICO Controversy (July 2025)

In July 2025, Pump.fun conducted a token offering for its native PUMP token, raising $1.3 billion in total ($600 million public sale, $700 million private sale). The public portion sold out in under 12 minutes. The offering drew significant backlash for several reasons: (1) token allocation gave approximately 40% to the team and investors against only 15% for the public sale; (2) the co-founder had previously stated 'every pre-sale is a scam,' a quote that circulated widely during the controversy; (3) no vesting period on team tokens created immediate sell pressure; (4) the initial fully-diluted valuation of approximately $4 billion was criticized as unsupported by the platform's declining revenue, which had fallen approximately 90% from its January 2025 peak; and (5) the token dropped more than 11% within two days of the public sale, then declined a further 18% once tokens were unlocked on exchanges. By late 2025, PUMP had declined approximately 80% from its ICO price. Critics in the community alleged the ICO functioned as an exit liquidity event. Pump.fun conducted the offering while facing an active consolidated class-action lawsuit and a UK FCA regulatory warning.

Sources

Timeline

2024-01-19

Pump.fun launches on Solana, founded by Noah Tweedale, Alon Cohen, and Dylan Kerler.

pump.fun Wikipedia

2024-05-16

Former employee Jarret Dunn ('STACCoverflow') exploits Pump.fun bonding curve contracts using flash loans and privileged key access, draining approximately $1.9 million in SOL before airdropping the funds to random wallets.

CryptoSlate

2024-05-18

Jarret Dunn arrested in London and charged with theft of $2 million and conspiracy to steal $80 million. Released on bail.

CryptoNews

2024-11-25

Livestream controversy begins after safety researcher flags suicide-threat incident. Over the following days, reports emerge of drug use, animal abuse, explicit content, and a man fatally shooting himself during an X livestream after a Pump.fun rug pull loss.

CryptoNews

2024-11-30

Pump.fun suspends its livestreaming feature entirely amid community boycott threats and media scrutiny.

Decrypt

2024-12-03

UK Financial Conduct Authority publishes a formal warning stating Pump.fun may be operating financial services without authorization and may be targeting UK consumers.

FCA Official Warning

2024-12-03

Pump.fun bans all UK users from the platform in response to the FCA warning. Co-founder Alon Cohen confirms the ban is not temporary.

Decrypt

2025-01-16

First class-action lawsuit filed in SDNY relating to the $PNUT token, alleging unregistered securities offerings.

DLA Piper

2025-01-30

Second proposed class-action lawsuit (Aguilar v. Baton Corporation Ltd., 1:25-cv-00880) filed in SDNY, alleging operation of an unregistered securities exchange, 'Ponzi-like' schemes, and retail losses of $4-5.5 billion.

CourtListener

2025-02-23

ZachXBT publishes findings linking Lazarus Group wallets — tied to the Bybit $1.5 billion hack — to the 'QinShihuang' memecoin launched on Pump.fun, with $26 million in associated trading volume. Pump.fun blocks the token.

CoinTelegraph via TradingView

2025-02-26

Pump.fun's official X account is compromised by hackers who post a fraudulent 'PUMP' governance token announcement. The fake token reaches a $5 million market cap before collapsing. ZachXBT assesses the breach as likely an X platform social engineering attack rather than a Pump.fun team failure.

Decrypt

2025-04-01

Pump.fun relaunches livestreaming feature with new moderation policy, initially to 5% of users, expanding to 100%.

BeInCrypto

2025-05-07

Solidus Labs report classifying 98.6% of Pump.fun tokens as rug pulls or pump-and-dump schemes is published. Pump.fun disputes the report.

CoinDesk

2025-06-01

Judge Colleen McMahon consolidates two class-action cases against Pump.fun into a single proceeding in SDNY.

CryptoTimes

2025-07-12

Pump.fun conducts PUMP token ICO, raising $1.3 billion total ($600M public, $700M private). Public sale sells out in under 12 minutes. Backlash follows over team allocation, co-founder's past anti-presale statements, and valuation concerns.

CoinTelegraph

2025-12-09

Judge Colleen McMahon grants plaintiffs permission to file a Second Amended Complaint incorporating 5,000+ whistleblower-sourced internal messages. Filing deadline set for January 7, 2026.

CryptoTimes

2025-12-10

CoinDesk names Pump.fun one of its 'Most Influential' entities of 2025.

CoinDesk

model: claude-sonnet-4-6

generated: 5/7/2026, 5:08:56 AM

last updated: 5/7/2026, 5:08:56 AM

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