Should Pump.fun be banned?

A recent study on the memecoin creation platform Pump fun, one of the lifebloods of the Solana blockchain, revealed a concerning picture for both the crypto sector and investors.

According to a report prepared by the New York-based digital asset analysis company Solidus Labs, 98.6% of the tokens released on Pump.fun are hosting scams that either follow rugpull or fill/empty (pump/dump) methods.

98.6% of the tokens launched are garbage

The report from Solidus Labs stated that since January 2024, more than 7 million tokens have been launched on Pump.fun, and only 97,000 of them have at least $1,000 in liquidity.

The report included the following statements on the subject: "These unchecked fraudulent activities pose serious risks not only for traders in terms of financial loss but also represent significant regulatory and reputational threats for crypto institutions that facilitate memecoin trading."

Rugpulls and similar scams are rampant

In a report published by Solidus Labs, it was noted that the popular decentralized exchange on the Solana network, Pump.fun, hosts a daily volume exceeding 100 million dollars. The company analyzed the performance of tokens created between January 2024 and March 2025 on Pump.fun, finding that "more than 7 million tokens were distributed with at least five transactions, but only 97,000 tokens had liquidity over 1,000 dollars." The report stated, "98.6% of the tokens on Pump.fun quickly turned into worthless pump-and-dump schemes after being released, highlighting the extreme risks faced by investors."

Token issuers are "naturally" advantaged

The report stated that the economic model on which Pump.fun is based naturally provides advantages for those issuing tokens through this platform: "Understanding the token economy on Pump.fun reveals systemic risks even further. The automatic market maker (AMM) uses a bonding curve pricing model that inherently favors token creators."

The connection curve here refers to a pricing mechanism where token prices increase exponentially with each additional purchase, inherently benefiting early buyers and disadvantaging latecomers. Indeed, while creators profit directly from each increasing purchase, later joining traders always face inflated token prices and significant loss risks when creators liquidate their assets.

Those dealing with memecoins think that the laws do not apply to them.

According to Yuriy Brisov from Digital and Analogue Partners, who made evaluations on the subject, in the case of Pump.fun, token creators can be held responsible for frauds that occur through electronic tools, including the internet. Brisov, who stated, "For reasons that are not understandable to me, entrepreneurs dealing with memecoins think that the laws do not apply to them," added: "If you are engaging in wash trading on Pump.fun, the same laws will apply to you."

On the other hand, Pump.fun spokesperson Troy Gravitt stated that he disagreed with the findings presented in the report. Gravitt expressed that Solidus Labs, which prepared the report, "lacks a fundamental understanding of memecoins," and continued his remarks: "98% of memecoins – just like NFTs, tweets, Instagram posts, trading cards, and most artworks – have very little value in the long term. That is precisely the issue. What matters is the existence of a functioning market that connects motivated buyers and sellers, and the fundamental cultural expression that the market attributes or assigns value to over time. The magic happens here, and this is where we learn what is truly valuable."

This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should conduct their own research when making decisions.