Pump.fun: meme coin factory or a breeding ground for crypto scams?

What is Pump.fun?

Pump.fun is a platform that enables the quick and easy launch of new meme coins on the Solana blockchain, while also facilitating fundraising for these projects.

Among other token launchpads, Pump.fun distinguishes itself with a user-friendly interface and a robust set of tools to attract attention to new projects, including a built-in streaming platform.

The platform's fees are also exceptionally low: launching a token costs less than $2. Additionally, Pump.fun charges a 1% fee on token sales and 1.5 SOL when a token reaches a market cap of $90,000.

The token launch mechanism is based on a so-called "fair launch": the entire supply of a new token is released at once, with no ability to lock portions for "insiders" or run a pre-sale. Moreover, the Pump.fun team claims that rug pulls (i.e., token creators vanishing with user funds) are technically impossible on the platform. In practice, however, this means little — there are no safeguards against "soft rug pulls" or classic pump-and-dump schemes.

Pump. fun's team deliberately distances itself from moderating tokens or platform content, only acting when compelled by law enforcement. For instance, in December 2024, after a warning from the UK's Financial Conduct Authority (FCA) regarding illegal activities, Pump.fun banned all users from the UK.

A combination of these characteristics, along with an aggressive marketing campaign, triggered explosive growth for Pump.fun. In the 18 months since its launch in early 2024, over 7 million tokens have been launched on the platform — the vast majority being meme coins. As a result, Pump.fun has become a key driver behind the growth of both the meme coin sector and activity on the Solana blockchain.

Pump.fun: scams and scandals

Pump.fun has emerged as one of the primary "scam centers" in the modern crypto world. The overwhelming majority of tokens on the platform are launched by scammers executing either a rug pull or the classic pump-and-dump tactic — artificially inflating a token's value and then dumping their holdings.

According to a report by Solidus Labs, as of May 2025, 98.6% of all tokens launched on Pump.fun were involved in such fraudulent schemes. Solidus Labs made a clear distinction between honest failed projects and those using deceptive tactics.

Another study, this time from Merkle Science, found that scammers made at least $500 million in 2024 from rug pulls on Pump.fun.

The most notorious case was the Gen Z Quant token, launched on Pump.fun by a 13-year-old boy. He pumped the token using the platform's streaming tools, then dumped his holdings and "disappeared," walking away with around $50,000. While the scam itself wasn't unique, the fact that a teenager pulled it off so easily sparked widespread outrage.

Given all of the above, it's no surprise that Pump.fun has earned a highly questionable reputation. Its operations are already banned in some countries, including the UK. Additionally, the platform is facing multiple lawsuits from investors accusing it of enabling fraudulent activity.

The PUMP cryptocurrency

PUMP, the native token of Pump.fun, was only recently introduced to the market on July 12, 2025. At launch, the token was priced at $0.00627. It hit an all-time high of $0.009795 just three hours after trading began.

As expected, the platform's controversial reputation didn't deter public interest in the PUMP token. By July 21, the token's market cap had surpassed $1.5 billion, placing it at #63 on CoinMarketCap.

However, PUMP has been trading below its listing price over the past week, and as of July 21, it had dropped to $0.004.

PUMP outlook

Pump. fun's widespread notoriety nearly guarantees ongoing interest in its native currency — at least as long as the platform continues to grow and operate.

However, it must be acknowledged that Pump.fun is currently in a precarious legal position. Regulatory scrutiny, spurred by the "Wild West" nature of its operations, poses a significant threat.

If the platform manages to fend off lawsuits and continues operating without significant restrictions, PUMP could become one of the most critical digital assets on the market. Otherwise, its legal troubles may spell the downfall of both the platform and its token.