US law firm seeks legal action against Pump.fun for investors with losses

New York-based law firm Burwick announced Wednesday that it is seeking legal action against Solana memecoin launchpad Pump.fun on behalf of investors that experienced losses on the platform.

“This announcement follows months of working alongside everyday people that have lost significant amounts of money to memecoins, rugs, and unfulfilled promises,” Burwick wrote in its Wednesday X post.

Burwick claimed that Pump.fun pocketed “hundreds of millions” in fees while illegal drug use, acts of self-harm, racism, antisemitism and other antisocial acts appeared on the platform. In November, Pump.fun indefinitely disabled its live-streaming feature after reports of abusive content.

“The creator of this platform has chosen to remain anonymous, despite acknowledging the importance of transparency in scaling and retail engagement, which raises serious concerns about accountability,” Burwick said. “This focus has led to an ecosystem that hides between crypto buzzwords to exploit everyday people.”

The law firm also noted that the current crypto landscape is dominated by scams and speculative assets like memecoins, which benefit a small group of insiders at the expense of crypto investors. In the X post, Burwick shared a link for potential clients to join the lawsuit.

The Block has reached out to Pump.fun for comment.

Gamblers or victims?

In response to Burwick’s announcement, renowned blockchain sleuth ZachXBT wrote in a reply to the X post that those who choose to “gamble” in micro-cap memecoins are not actual victims or investors. 

Burwick’s X handle shared founding partner Max Burwick’s comment as a follow-up, in which he made an analogy to describe memecoin scams as a casino where the dealers could manipulate the card game.

“The reality is that memecoins aren't gambling in the traditional sense, as defined by regulations and rules,” Max Burwick, Burwick’s founding partner, wrote . “They are speculative assets that can be manipulated through multiple means.”

Pump.fun 's booming volume in 2024 helped propel memecoin to become an enduring trend in the crypto market. The Solana-based platform collected $80.3 million in revenue last month, compared to $93.8 million in November, according to DefiLlama data .