Pump.fun Co-founder Denies Token Launch Amid Mounting Legal Challenges

Speculation and lawsuits cloud the future of Solana’s leading memecoin platform.

Pump.fun, the Solana-based memecoin launchpad, finds itself at the center of controversy following rumors of an imminent token launch through a Dutch auction on centralized exchanges. The speculation gained traction after Wu Blockchain claimed to have obtained documents confirming the token launch, complete with details on supply allocation and an unlock schedule.

However, Pump.fun’s co-founder Alan Cohen swiftly refuted these claims. In a public statement, Cohen dismissed the reports as inaccurate, asserting that Pump.fun has no plans for a token launch or IPO. He urged users to rely solely on official updates from the team, emphasizing that the platform’s primary focus remains on enhancing user experience and platform functionality.

Despite Cohen’s denial, Wu Blockchain doubled down, insisting they possess strong evidence of an upcoming token issuance. They alleged having detailed documentation prepared for centralized exchanges (CEXs) and claimed CEX staff independently confirmed the launch plans, although the exact timing remains unclear. Wu Blockchain even challenged Cohen directly, accusing him of misleading the community.

Further fueling skepticism are reports suggesting a token distribution strategy favoring insiders. Allegedly, early investors would receive 22.05% of the token supply, while the team would control 25%, subject to a one-year lockup and a gradual release over three years. Neither Cohen nor Pump.fun has addressed these specific allegations.

Adding to Pump.fun’s troubles are multiple legal battles. Last month, Burwick Law and Wolf Popper LLP filed lawsuits against the platform on behalf of investors alleging financial losses. The lawsuits accuse Pump.fun of selling unregistered securities in the form of meme tokens, violating U.S. securities laws. The plaintiffs claim the platform generated nearly $500 million in fees through these activities.

The legal complaints focus on tokens such as FWOG, FRED, and GRIFFAIN, alleging that Pump.fun promoted these assets with exaggerated promises of substantial returns. Plaintiffs argue that the tokens should be classified as securities, requiring proper registration. They are seeking damages, legal fees, and the rescission of token purchases.

The lawsuits further accuse Pump.fun of operating what they describe as a new form of Ponzi scheme and pump-and-dump tactics. Plaintiffs claim the platform leveraged influencers to create artificial hype, luring retail investors into making poorly informed investment decisions.

Compounding the legal woes, Burwick Law and Wolf Popper LLP issued a cease and desist letter to Pump.fun, demanding the removal of tokens that allegedly impersonate the firms. This action followed the creation of a token named ‘DOGSHIT2,’ which the law firms claim was designed to intimidate clients and interfere with ongoing litigation.

Pump.fun’s legal troubles extend beyond the U.S. The UK’s Financial Conduct Authority (FCA) previously issued a warning against the platform and blocked access to it within the country, citing concerns over unregulated financial activities.

As Pump.fun navigates these turbulent waters, the community remains divided. Some users stand by the platform, while others question its transparency and regulatory compliance. The ongoing lawsuits and persistent token launch rumors leave Pump.fun at a critical juncture, with its reputation and future hanging in the balance.

photo source / Blockonome