Is Pump.fun facing a "double whammy"? Is the end of meme coin casinos upon us?

The Meme coin issuance platform on the Solana blockchain Pump.fun not only faces a number of class action lawsuits in the New York federal court, its most important publicity position, the official account of social platform X has also been permanently banned, and a frenzied speculative feast seems to have come to an abrupt end. This article is based on an article written by MarsBit News and compiled and contributed by Foresight News. (Synopsis: Pump.fun dump currency profits again!) It is expected that the proceeds will be distributed to PUMP token holders) (Background supplement: Pump.fun plans to issue tokens to raise 1 billion magnesium, and the valuation will reach 4 billion magnesium into a crypto unicorn? At one time, the Meme coin issuance platform on the Solana blockchain Pump.fun was a digital amusement park that never closed, a money-making machine. Here, for less than $2, anyone can create a new cryptocurrency in minutes and plunge into a frenzied speculative feast. However, the hustle and bustle came to an abrupt end. Today, the amusement park lights go out and fall silent. Not only is it facing multiple class action lawsuits in New York federal court, but the official account of its most important publicity position, social platform X, has also been permanently banned. The sudden fall of Pump.fun is not an isolated case, it is more like a prism, reflecting the deep internal contradictions behind the Meme coin frenzy. This is a no-access, gamified financial experiment that collides head-on with cold securities laws, the life-and-death power of centralized platforms, and the brutal laws of the market economy. Is this digital binge a short-lived bubble or a harbinger of the rise of a new market speculative force that cannot be tamed? The trajectory of its rise and fall gives us an excellent anatomical sample. I. The Anatomy of the Meme Factory: Rise and Decay The rise of the Pump.fun stems from its extreme "democratization" of the threshold for financial speculation, and its decline is rooted in the systemic flaws inherent in this model. "Innovation": opening the casino door to everyone The core mechanism of Pump.fun is that it simplifies the token creation process on the Solana blockchain to the extreme, creating a one-stop platform for Meme coin creation and trading. Its soul is a mathematical model known as the Bonding Curve. Under this model, the price of the token automatically rises as the demand for purchases increases, which not only creates a huge incentive for early participants, but also provides a steady stream of fuel for speculative frenzy. This mechanism was packaged as a kind of "fair distribution", quickly making Pump.fun a "Meme coin casino" among the population in the circle. This casino business is extremely hot. The platform has built a lucrative business model by charging an interchange fee of 1% per transaction and a fee of 1.5 SOL for tokens that successfully "graduate" (i.e., landing on a decentralized exchange after a certain threshold of market capitalization). By the beginning of 2025, the cumulative fees collected by the platform were close to $500 million, and its single-day revenue peaked even more than $15 million, making it an efficient money printing machine. Inner Corruption: A System Built on Scams Beneath the façade of prosperity, however, lies a shocking reality. A devastating report released by risk analysis firm Solidus Labs revealed that up to 98.6% of tokens issued on Pump.fun exhibited typical "pump-and-dump" scam characteristics, eventually zeroing out quickly and becoming worthless. This information completely tears off the disguise of "innovation" and "fairness" of the platform, exposing its essence as a hotbed of fraud on an industrial scale. The relationship between the platform's business model and fraud is not a simple tacit relationship, but a deep symbiosis. Pump.fun's revenue is directly linked to the token issuance and trading volume on its platform. Since the vast majority of transactions stem from fraudulent pull-up shipments, the platform's nearly $500 million in massive revenue actually comes from facilitating these scams. This creates a distorted incentive mechanism: in order to maximize revenue, platforms will inevitably prioritize lowering barriers and increasing trading volume, rather than strengthening security and protecting investors. This makes its so-called "fair distribution" promise particularly pale. The fragility of the platform has long been apparent. In May 2024, a former employee used his privileged access to steal approximately $1.9 million worth of assets through a flash loan attack, exposing a huge vulnerability in his internal controls. In February 2025, its official X account was hacked to promote scam tokens, once again highlighting its lack of resilience to external risks. The legal filings allege that platforms have made huge profits in an atmosphere of illegal and anti-social content, adding a layer of moral and reputational stains. Second, the liquidation of the law: when the Meme coin encounters the Haowei test When wild financial experiments touch the red line of the law, a liquidation is inevitable. In January 2025, two key class-action lawsuits were filed in federal court for the Southern District of New York, putting Pump.fun and the entities and founders behind it in the dock. The lawsuit is initiated by law firms such as Wolf Popper LLP and Burwick Law, and the defendants include Baton Corporation Ltd., Pump.fun's UK-based operating entity, and its founders, Alon Cohen, Dylan Kerler and Noah Bernhard Hugo Tweedale. The core allegation is that Pump.fun promoted and sold a large number of unregistered securities through its platform, in flagrant violation of the U.S. Securities Act of 1933. The plaintiff demanded that the platform refund all investors of the purchase price and compensate for the resulting economic losses, amounting to nearly $500 million. The legal weapon at the heart of the lawsuit is the 1946 Howey Test, the gold standard for determining whether an investment constitutes a "security." The plaintiffs' argument is extremely subversive: they argue that far from being a neutral provider of technical tools, Pump.fun is a "legal seller" and "co-issuer" actively involved in token offerings and sales. This argument is underpinned by the fact that Pump.fun deeply controls the entire process of tokens from birth to transaction: it provides standardized token-building tools, controls liquidity and pricing through a joint curve mechanism, and actively promotes these tokens through its platform and influencer partnerships. The lawsuit file describes this model as "a new evolution of the Ponzi and pull-up shipment scam." This legal strategy marks a significant evolution of litigation in the cryptocurrency space. In the past, regulators typically targeted issuers of individual tokens (such as the SEC's lawsuit against Ripple), but this approach was inefficient in the face of thousands of anonymous creators on the Pump.fun. Today, the plaintiffs have chosen to get to the point – taking the platform itself as the subject of liability. If this logic holds true in court, then any "one-click token" platform that provides standardized tools, controls pricing mechanisms, and participates in promotion could be identified as a seller of unregistered securities. This will fundamentally destroy this type of "distribution platform as a service" ...