Solana News Today: PUMP Token Plunges 25% as Legal Challenges and Airdrop Delays Trigger Sell-Off

Pump.fun’s native token PUMP has experienced a sharp price decline, losing 25% of its value within 24 hours as legal challenges and delays in its highly anticipated airdrop sent shockwaves through the cryptocurrency market [1]. The token’s price dropped to $0.0028, exacerbating a broader 42.4% weekly loss and a 45% decline from its July peak of $0.0068 [6]. The turmoil follows a class-action lawsuit filed by Burwick Law, which accuses Pump.fun of operating an unregistered securities exchange and a “slot machine”-style platform that exploits retail investors under the RICO Act [3]. The lawsuit, expanded in July 2025 to include Solana Labs, the Solana Foundation, Jito Labs, and the Jito Foundation, alleges fraudulent practices, false advertising, and unregistered securities, with estimated damages ranging between $4–5.5 billion [5].

Founder Alon Cohen’s announcement that the airdrop would not occur in the near future triggered an immediate selloff. The token had already lost over 50% of its value since its pre-sale, with its price falling below the initial offering price of $0.004 [6]. Cohen defended the delay, emphasizing the team’s focus on long-term platform development over short-term airdrop incentives, but the move failed to reassure investors. Legal pressures and the absence of a clear airdrop timeline have exposed Pump.fun’s reliance on speculative hype rather than intrinsic utility [6].

Market reactions have been mixed. While some high-profile investors, including Jeffrey Huang (Machi Big Brother), have added to their long positions despite losses exceeding $5.8 million, others have offloaded billions of tokens. Wallets linked to private sale investors sold 1.2 billion PUMP tokens, incurring a $1 million loss, as the platform’s fee-extraction mechanisms—which generated $741 million in SOL token fees—fueled concerns over fairness [6]. Critics argue Pump.fun’s bonding-curve launch mechanics resemble gambling, creating addictive hype cycles that disproportionately harm inexperienced traders [6].

The legal and market turmoil has intensified scrutiny of Pump.fun’s operations. A January 2025 lawsuit alleged unregistered securities practices, while UK users were banned in December 2024 amid regulatory concerns. By July 2025, the RICO class action estimated user losses at $4–5.5 billion, solidifying the platform’s controversial reputation [6]. Additionally, Pump.fun faced temporary suspensions in November 2024 for live-streaming harmful content, including explicit promotions, with restrictions re-enabled in April 2025 for 5% of users, raising questions about moderation practices [6].

Analysts highlight structural vulnerabilities in PUMP’s token economics. The July 2025 $600 million token sale, which fully diluted the valuation to $6.13 billion, revealed a 40% team/investor allocation with no vesting, leading to a post-launch 18% price drop [6]. The lack of a clear airdrop timeline has further destabilized market expectations, shifting focus to the platform’s core value proposition.

Pump.fun’s struggles underscore the risks of meme coin ecosystems that prioritize virality over sustainability. While Cohen’s emphasis on long-term development represents a strategic pivot, the token’s trajectory remains volatile. Investors now demand tangible utility rather than airdrop-driven speculation, with the platform’s ability to regain trust hinging on resolving legal challenges, transparent governance, and demonstrating real-world adoption [6].

Source:

[1] [PUMP Token Plunges 25% as Legal Pressure and Airdrop Delays Spark Sell-Off](https://www.ainvest.com/news/ethereum-news-today-pump-token-plunges-25-legal-pressure-airdrop-delays-spark-sell-2507/)

[3] [Pump.fun Faces $5.5B Class Action Alleging Unlicensed Casino Operations](https://cryptonews.com/news/pump-fun-accused-of-running-unlicensed-casino-in-5-5b-class-action-lawsuit/)

[5] [PUMP Crashes 20% as Pump.fun Founder Delays Airdrop and Lawsuit Widens](https://crypto.news/pump-token-crashes-pump-fun-founder-airdrop-delay-2025/)

[6] [PUMP Token Declines After Airdrop Delayed](https://web.ourcryptotalk.com/news/pump-token-declines-after-airdrop-delayed)