Pump.fun Faces Scrutiny After Extracting $741 Million in Fees

Pump.fun, a controversial Solana-based memecoin launchpad, is under intense scrutiny after extracting $741 million in fees from users. The platform has been accused of facilitating what critics describe as a “disease responsible for mass killings and suicides on livestream.” This damning accusation comes from prominent crypto influencer Crypto Bitlord, who estimates that over $20 billion has been extracted through scams on the platform alone. Bitlord calls for the complete removal of Pump.fun from the internet, stating that it would be a “net positive for the entire ecosystem.”

The criticism has intensified following the recent suspension of Pump.fun’s official account and that of co-founder Alon Cohen, raising questions about the platform’s operations. Pump.fun reportedly plans a $1 billion token sale at a $4 billion valuation, which has added to the controversy surrounding the platform.

According to blockchain analytics firm LookOnChain, Pump.fun has systematically converted its fee revenue by selling approximately 4.1 million SOL tokens worth $741 million at an average price of around $180 since May 2024. The platform deposited 3.84 million SOL worth $699 million directly to Kraken exchange while converting an additional 264,373 SOL into $41.64 million USDC, demonstrating the scale of value extraction from its user base. This revenue generation occurs despite data showing that 99.6% of traders on the platform have failed to realize profits exceeding $10,000, with only 293 wallets out of 13.55 million total addresses achieving earnings above $1 million.

The controversy surrounding Pump.fun extends far beyond financial metrics, encompassing serious concerns about its live-streaming feature, which has been linked to disturbing content. The platform initially suspended its live-streaming capabilities in November 2024 after users began broadcasting increasingly extreme content designed to manipulate token prices. However, it quietly reintroduced the feature to 5% of users in April 2025, promising enhanced moderation systems, but failed to deliver.

Pump.fun’s rise since its January 2024 launch has transformed it into a dominant force within the Solana ecosystem, processing over $66 billion in cumulative trading volume while launching an estimated 27,305 new tokens daily as of recent data. The platform’s fee structure reveals the stark asymmetry between user losses and platform profits. Pump.fun collects a 0.25% fee on every trade and has recently introduced an additional revenue-sharing model that directs 0.05% of trading fees to token creators. This new structure has drawn criticism for potentially rewarding malicious developers who abandon their projects after initial launches, commonly known as “rug pulls.” This system incentivizes the creation of low-quality tokens designed purely for quick profit extraction rather than genuine utility or community building.

The human cost of Pump.fun’s operations extends beyond financial losses to documented cases of psychological distress and harmful behavior broadcast on the platform’s livestreaming feature. It was reported that users were threatening self-harm or violence if their tokens failed to reach specific price targets. The recent suspension of Pump.fun’s account alongside several other memecoin-related platforms shows growing regulatory and platform pressure on the industry’s most controversial corners. While the reasons for the suspension have not been officially disclosed, speculation centers on potential violations related to unauthorized API usage, SEC investigations, or the platform’s connection to securities law violations. Pump.fun already faces a lawsuit alleging securities law violations for selling unregistered securities disguised as meme tokens. It also faces scrutiny for promoting “highly volatile” financial instruments to retail investors. The timing of the suspension proves particularly problematic for Pump.fun’s reported $1 billion fundraising plans, as the platform relied heavily on social media for user engagement and token promotion. Sources familiar with the matter indicate that the token sale would value the company at $4 billion, potentially making it one of the top 30 cryptocurrency projects by valuation.