Pump.fun Delays Token Auction Amid Legal Challenges

Pump.fun, a memecoin launchpad based on the Solana blockchain, has once again delayed its token auction, which was initially scheduled for June 25. The platform had aimed to raise $1 billion at a $4 billion valuation. According to crypto news reporter Colin Wu, the team now anticipates the auction to occur in mid-July. The launch, which began planning in 2024, has faced multiple postponements, with the latest suspension coinciding with escalating legal challenges in various jurisdictions.

Pump.fun is currently embroiled in legal issues, including a significant class action lawsuit. On January 15, Burwick Law filed a class action suit against the platform, alleging violations of securities laws and market manipulation. The lawsuit asserts that Pump.fun artificially inflated token prices for its own gain, resulting in substantial investor losses. Max Burwick, the founder of the law firm, characterized the project as "the ultimate evolution of multi-level marketing scams," targeting vulnerable individuals.

In addition to the class action lawsuit, Pump.fun is also facing allegations of intellectual property violations. In February, Burwick Law and Wolf Popper LLP issued a cease and desist letter over alleged IP infringements. User-generated memecoins on Pump.fun frequently use logos and names that may infringe on the intellectual property rights of private individuals or corporations.

The legal troubles have heightened community concerns. On June 16, X temporarily suspended the accounts of both Pump.fun and its founder, only to reinstate them a few days later. While neither X nor Pump.fun provided an explanation, the incident was not an isolated one, as several other crypto platforms also experienced temporary account suspensions. However, it remains unclear whether the Pump.fun ban was directly related to its ongoing legal issues.