Meme coins – humor-themed tokens with little or no inherent utility – exploded in popularity in 2024, fueled by speculative frenzy and social media hype. The Solana-based platform Pump.fun emerged as the epicenter of this phenomenon, allowing anyone to create and trade meme coins almost instantly and for minimal cost. Launched in January 2024, Pump.fun quickly became “ground zero” for meme coin launches, hosting millions of new tokens within its first year. This analysis examines the economic dynamics of Pump.fun’s meme coin ecosystem – including market behavior, trading data, investor trends, volatility, and notable cases – and the legal and regulatory issues surrounding these tokens, with an emphasis on U.S. and European perspectives.

Economic Perspective on Pump.fun Meme Coins

Market Behavior and Platform Dynamics

Pump.fun fundamentally lowered barriers to launching a token: with a Solana wallet and a few clicks, users can deploy a new coin and have it immediately tradeable via an automated bonding curve market maker. Every coin is a “fair launch” with no initial liquidity required, which democratized participation but also unleashed an unprecedented flood of meme coins. By January 2025 – only one year after launch – over 6 million unique tokens had been created on Pump.fun. By mid-2025, the scale of activity had exploded. Pump.fun had reportedly spawned more than 11 million tokens, at times responsible for roughly 70 percent of all new token launches on Solana — a level of dominance rarely seen on any blockchain. Most of these coins are purely speculative “meme coins” with no function beyond trading, and the vast majority fail to gain traction or lasting value. In fact, fewer than about 1% of Pump.fun tokens ever reach the modest market capitalization (~$50,000) needed to “graduate” to external decentralized exchanges like Raydium. This means almost all Pump.fun coins remain short-lived experiments or jokes that never extend beyond the platform’s internal markets.

The trading environment on Pump.fun has been likened to a social media experience, often compared to a chaotic imageboard or casino-like forum. Token listings are presented in a meme-friendly catalog, and users (identified by wallet addresses or nicknames) frenetically trade and chat. At one point, the platform even integrated a live-streaming feature for coin creators to perform stunts and hype their tokens in real-time. This “degenerate” atmosphere of instant gratification and viral humor helped Pump.fun become the fastest-growing crypto application in history by revenue in 2024. Pump.fun amassed $100 million in fees in just 217 days – faster than any protocol before it – and by mid-2025 it had generated over $780 million in cumulative revenue from its 1% trading fee. On peak activity days, Pump.fun has been responsible for the lion’s share of Solana’s on-chain activity; according to Dune Analytics data reported by media outlets, Pump.fun accounted for approximately 71 % of new token launches on Solana on peak weekend days (e.g., 71.1 % Saturday, 69.5 % Sunday). Pump.fun’s rapid ascent culminated in a July 2025 token offering of its native token ($PUMP) that raised $600 million in 12 minutes, driving the platform’s valuation into the billions.

Trading Volumes, Market Capitalization, and Participation

Trading volumes on Pump.fun have likewise been staggering, reflecting the frenzy of users chasing the next viral coin. By mid-2025, weekly trading volumes on the platform were reported around $2.2 billion, and the momentum only increased through the year. In a striking example, on September 15 2025, Pump.fun processed about $1.02 billion in trading volume within 24 hours — generating roughly $10 million in platform fees at its 1% rate. This single-day volume surpassed activity on many major decentralized exchanges and underscores the scale of meme-coin speculation. The broader meme-coin market — largely driven by platforms like Pump.fun — was estimated at over $100 billion in aggregate market value by early 2025. A handful of the most successful Pump.fun-launched coins have attained market capitalizations in the hundreds of millions, although such valuations are often fleeting.

User participation is likewise enormous and global. Millions of traders – from crypto novices to seasoned speculators – have tried their hand at minting or flipping Pump.fun tokens. The platform’s low barrier to entry (anyone with a Solana wallet can join, no KYC needed) means participants range from teenagers to celebrities. Even minors have engaged in creating and trading meme coins; for example, a 13-year-old famously launched a token on Pump.fun and earned tens of thousands of dollars in profit overnight (before facing community backlash). Social media personalities and influencers also flocked to Pump.fun: in mid-2024 a wave of celebrities including rapper Iggy Azalea, Caitlyn Jenner, Jason Derulo, and others issued their own meme tokens on the platform to capitalize on the trend. This blend of mass retail speculation and viral celebrity promotion drove frenetic turnover. 

With that in mind, token velocity – the rate at which coins are traded and then abandoned for the next trend – is extremely high. In practice, meme coins on Pump.fun often have lifespans of mere hours or days of intense trading before interest shifts. For instance, one hyped coin launched by an internet personality in December 2024 lost 95% of its value within hours of launch, causing an uproar among late investors. Yet, on that same day, traders had already moved on to pouring funds into a different meme coin (a token themed after a famous pet squirrel) which surged to a $1 billion valuation in short order. This illustrates how quickly capital rotates between fleeting memes on Pump.fun – a speculative musical chairs where attention (and liquidity) hop from one coin to the next at breakneck speed.

Valuations, Investor Behavior, and Trends

Valuations in the Pump.fun ecosystem are driven almost entirely by speculative fervor and meme virality. Because these tokens generate no cash flow, value is attention-driven. Accordingly, Hype can catapult a joke token from near-zero to a multi-million dollar market cap in a day, only for it to collapse shortly after. Investor behavior is dominated by fear of missing out (FOMO) and momentum-chasing rather than fundamental analysis – there are no fundamentals to analyze. Many traders buy in hoping to ride a coin “to the moon” on the back of viral popularity, fully aware that they are effectively gambling. Indeed, while some people have made fortunes during this meme coin boom, “many others lose out” and end up holding worthless tokens. One venture capitalist described memecoin trading as purely “PvP” (player-versus-player) – “for someone to win, someone else has to lose, and often it’s the most naive or late-arriving traders who lose the most”. In other words, meme coin markets tend to function as zero-sum (or even negative-sum after fees) redistribution of wealth among speculators.

Several distinct trends and sub-trends have characterized the Pump.fun memecoin mania. Early on, there was a “celebrity coin” craze: for example, in May 2024, Iggy Azalea’s $MOTHER coin (cheekily themed around her own viral persona) launched on Pump.fun and quickly reached a total valuation of about $240 million within two weeks. However, it later fell to around $50 million as initial hype cooled. Around the same time, other public figures from Caitlyn Jenner to controversial influencer Andrew Tate jumped in with personal tokens, leveraging their fanbases for instant buyers. Another wave involved political memes – e.g. tokens named after Donald Trump or other political figures – especially after a memecoin dubbed $TRUMP (not launched on Pump.fun, but on Solana) skyrocketed in late 2024 following Trump’s U.S. election victory. That event triggered a broader surge in meme coins (so-called “memecoin season” of late 2024), lifting copycats like Fartcoin – a Pump.fun-launched joke token – to briefly hit a $1 billion market cap on pure speculative momentum. Other novelty themes had their moments as well: there were memecoins promoted by AI chatbots, coins launched by a child (with adult supervision), and even one developer who set himself on fire on livestream as a publicity stunt to pump his token’s price.

At the height of the frenzy, even professional investors took notice. A few crypto hedge funds reportedly dipped into memecoins in 2024 seeking outsize returns amid the volatility. Meanwhile, prominent venture capitalists debated the phenomenon’s broader implications. One view – expressed by Pantera Capital – is that the memecoin craze could be a “Trojan Horse” for crypto adoption, attracting new users who might later explore more substantive projects. According to this view, the sheer on-chain activity and user onboarding from meme coins could indirectly benefit the crypto ecosystem (e.g. more Solana users who might eventually use other Solana-based applications). However, many others argue that this mania is harming the industry’s reputation and wasting resources. Eddy Lazarin, an executive at a16z (Andreessen Horowitz), lamented that the boom in meme tokens makes crypto look “like a risky casino… a series of false promises masking a casino,” which “deeply affects adoption, regulation, and builder behavior” in a negative way. In short, critics worry that “paradise for gamblers and grifters” optics will scare off serious investors and invite regulatory crackdowns, undermining the credibility of crypto as a whole.

Speculation, Volatility, and Value Creation vs. Destruction

Extreme volatility is the hallmark of Pump.fun meme coins. Price swings of tens of percent in minutes, 100× run-ups in hours, and near-total losses in a day are commonplace. Such dynamics are fertile ground for pump-and-dump schemes – a longstanding form of market manipulation now supercharged by the speed of crypto. Pump.fun’s design (in particular its bonding curve automated pricing) means early buyers of a new token see the price rise rapidly as more people buy in. This creates strong incentives for insiders or influencers to aggressively promote a new coin, drive up its price, then secretly sell their holdings at the peak – leaving latecomers with heavy losses. Reports indicate that Pump.fun’s ecosystem has indeed been plagued by these patterns. The platform’s own founders acknowledged a high risk of rug pulls and claimed they launched Pump.fun to level the playing field, yet the structure still “amplifies the potential financial harm by creating a dynamic whereby early buyers benefit disproportionately”. In one egregious episode, an early teen user minted a meme coin on Pump.fun, hyped it on social channels, then dumped it for a ~$50,000 profit – only to face a “revenge pump” from irate community members and even doxxing threats against his family in retaliation. Such incidents underscore the Wild West nature of this market, blurring the line between “for fun” speculation and real financial harm.

From a classical economic perspective, the value creation in this memecoin mania is questionable. Very few Pump.fun tokens sustain long-term value or utility; most wealth generated is rapidly redistributed or destroyed through boom-bust cycles. A small minority of traders and token creators (typically those who enter earliest or orchestrate the pumps) reap outsized gains, while a large number of late-arriving retail participants bear the losses. Additionally, the platform itself captures a significant portion of the activity as revenue – nearly $800 million by mid-2025 – which is effectively funded by traders’ transaction fees. In that sense Pump.fun has created value for its operators and early backers (as evidenced by its $PUMP token’s multi-billion dollar valuation), but whether any net value has been created for society or just shuffled among speculators is debatable. Critics note that the memecoin craze has features of a zero-sum game (minus fees), or worse, a negative-sum game once one accounts for the capital that evaporates in crashes and scam exits. Indeed, by early 2024 a steep correction occurred: after a peak of mania in January, the collective memecoin market cap sharply dropped by approximately $47 billion by that February, as many bubble valuations imploded. This pattern repeated in late 2024 – for example, the LIBRA token (unrelated to Facebook’s project of the same name) skyrocketed after a tweet from a politician, then “promptly collapsed” in what was widely labeled as a rug pull. Such episodes suggest that far more value has been destroyed (through rapid devaluations of tokens) than sustainably created in the Pump.fun meme coin arena.

Nonetheless, the cultural and financial phenomenon of Pump.fun cannot be written off as entirely pointless. It has provided a massive real-time experiment in open financial markets driven by crowd psychology. Some token communities attempt to innovate post-launch – for example, Iggy Azalea sought to give her $MOTHER coin a longer life by finding it a use case (the token was accepted as payment by a telecom startup she invested in). These efforts to attach at least some utility or narrative to memecoins are an attempt to transcend pure speculation. In rare cases, a meme coin might evolve into a community with ongoing value (much like Dogecoin maintained a cult following and sizable market cap). By and large, however, Pump.fun’s economic landscape in 2024–2025 has been characterized by speculation-fueled volatility. In the words of one observer, it represents “financial speculation in its rawest form” – a high-stakes game of greater fool trading. The net effect has been a massive transfer of funds among traders and into the platform coffers, with only ephemeral meme-driven “value” created. The sustainability of this model remains dubious, as each new wave of entrants eventually learns that for every big winner story (the early buyer who turned $100 into $100k), there are dozens of losers left holding the bag.

Notable Case Studies of Pump.fun Meme Coins

A few standout examples illustrate the extremes of success and failure among Pump.fun-launched tokens:

• Fartcoin (FART) – Initially created as a crude joke, Fartcoin became one of Pump.fun’s earliest viral hits. In late 2024, amid a broader memecoin resurgence tied to political news, FART’s price inexplicably mooned. It “briefly hit a $1 billion valuation” at the apex of the frenzy, making it one of the first Pump.fun coins to reach 10-figure market cap. This peak was short-lived, but it cemented Fartcoin’s place in memecoin lore and signaled that even the silliest concept could command real money in this climate. Notably, the rally coincided with hype around a $TRUMP token elsewhere, showing how external events can spark speculative rotations on Pump.fun.
• Peanut (PNUT) – Peanut coin was a meme token referencing a famous New York City squirrel (named Peanut) that had made headlines. PNUT launched on Pump.fun in late 2024 and attracted a frenzy of buyers – so much so that it rapidly climbed to over a $1 billion market cap. Within days (if not hours) of reaching this pinnacle, PNUT’s price collapsed violently. Many late investors were left with near-worthless bags. The PNUT saga became emblematic of Pump.fun volatility – its boom and bust were even cited as evidence in a later lawsuit, with plaintiffs arguing it exemplified how the platform enabled pump-and-dump dynamics. PNUT’s rise-and-crash also occurred the same day as the “Hawk” coin flop (described next), underscoring how one meme’s implosion doesn’t stop speculators from immediately chasing the next hot coin.
• “Hawk” Tuah Coin (HAWK) – This token was launched in December 2024 by an internet personality (Hailey “Hawk Tuah” Welch) known for a viral meme. HAWK coin’s fate was disastrous: it lost 95% of its value in the first few hours of trading, as initial excitement gave way to a mass sell-off. The coin’s collapse provoked a loud outcry on social media and forums, as many retail buyers felt duped. In the aftermath, some investors filed a class-action lawsuit (which will be discussed later) targeting the coin’s promoters and later Pump.fun itself, alleging fraudulent promotion. The Hawk coin incident is often highlighted as an example of celebrities or influencers underestimating the financial risks to their followers in launching memecoins – a mere meme can quickly turn into real losses and legal headaches.
• Mother Iggy (MOTHER) – Launched by rapper Iggy Azalea in mid-2024, $MOTHER was one of the first high-profile celebrity coins on Pump.fun. Azalea actively promoted the token to her 7+ million social media followers, employing provocative memes and marketing. This drove the coin’s market cap to around $240 million within two weeks, an impressive feat for a personal meme coin. However, like most, MOTHER could not sustain that valuation; it later fell by roughly 80%, hovering near $50 million. Uniquely, the artist has continued to engage with her token long-term, even integrating it with a real business (a mobile carrier accepting MOTHER for payments). While MOTHER’s price volatility mirrored the typical boom-bust, Azalea’s case is notable for trying to buck the trend by building a community and some utility around her meme coin to avoid it being just a pump-and-dump. Time will tell if this strategy yields a different outcome or merely slows the descent.
• Fred, FWOG, and Griffain tokens – These were lesser-known meme coins on Pump.fun that gained notoriety after the fact due to litigation. According to one lawsuit, FRED, FWOG, and GRIFFAIN were among tokens promoted heavily (via high-quality graphics, influencer campaigns, and even exchange listings) to create an illusion of legitimacy, only to have insiders dump them on the public. An investor claimed he suffered losses in these coins and alleged they were part of a coordinated $500 million scheme by Pump.fun and its partners to extract fees from speculators. While these tokens themselves did not become household names, they represent a class of Pump.fun coins that achieved moderate success (enough to get listed on exchanges and build social media buzz) but ultimately crashed, fueling accusations of fraud.

These cases underscore the turbulent life cycle of Pump.fun meme coins: rapid ascent fueled by hype, and often an equally rapid collapse. A tiny fraction of tokens may achieve extraordinary traction (into the hundreds of millions or beyond), but virtually none have proven stable. For every Fartcoin or MOTHER that briefly soars, there are thousands of “dead” coins that never attract more than a handful of traders. In economic terms, Pump.fun has created a highly Darwinian market for memecoins – one where survival beyond a few days is the exception, not the rule. It is an environment of rampant experimentation, speculation, and creative (if sometimes reckless) meme entrepreneurship, but one fraught with risk for participants. As the next section explores, this wild market has not only financial implications but also significant legal and regulatory ramifications.

Legal and Regulatory Perspective

U.S. Regulatory Treatment and Risks (SEC, CFTC, FinCEN)

In the United States, the regulatory status of meme coins and platforms like Pump.fun has been a grey area – caught between securities law, commodity law, and gambling/consumer protection concerns. A fundamental question has been whether meme coins should be considered “securities” under U.S. law. In early 2025, the U.S. Securities and Exchange Commission (SEC) provided some much-needed clarity. The SEC’s Division of Corporation Finance published a Staff Statement on Meme Coins (Feb 27, 2025) reflecting the staff’s view that tokens bought primarily for entertainment, community hype or social reasons — with no expectation of profits derived from a promoter’s efforts — may not involve the offer and sale of securities under federal law. However, the document emphasises that this non-securities view is staff guidance only — not a binding rule — and that individual meme-coin transactions will continue to be evaluated on their specific facts and “economic realities". Accordingly, under the staff’s interpretation, trading so-called “pure” meme coins would not, on its face, trigger the registration or disclosure requirements of federal securities laws. This stance implies that issuers or exchanges of such tokens may fall outside direct SEC oversight, but it also means investors in these assets lack the protections normally afforded under securities regulation, such as mandated disclosures or recourse under SEC rules if things go wrong.

Nonetheless the SEC’s guidance came with important caveats. The agency warned that if a product is labeled a “meme coin” but includes features of an investment – for example, if funds are pooled for a common enterprise or if promoters make promises of profit from their own efforts – then it could still be deemed a security despite the meme branding. In other words, regulators will “evaluate the economic realities” of each case. A coin that quacks like an investment (e.g. implying a roadmap, revenue sharing, or significant managerial efforts to boost its value) won’t escape SEC jurisdiction just by adopting a meme veneer. This nuance is directly relevant to Pump.fun, where some tokens have been aggressively marketed with slogans like “this coin is headed to the moon!” or framed as part of a developer’s project. Such marketing could create a “reasonable expectation of profits” in buyers from the efforts of the token creators or the platform – a key element of the Howey test for investment contracts. In fact, a class-action lawsuit filed in New York alleges that Pump.fun’s entire model effectively sold unregistered securities, because the platform and token creators “suggested that [coins were] headed to the moon,” inducing profit expectations among retail buyers. The SEC itself, as of 2025, has not taken enforcement action against Pump.fun or similar pure memecoin platforms, consistent with its stance that true meme coins aren’t securities. However, the agency is undoubtedly monitoring the space for instances where fraud or investment-contract-like schemes emerge under the meme coin label.

Aside from the SEC, other U.S. regulators also have partial oversight. The Commodity Futures Trading Commission (CFTC) can claim jurisdiction if these tokens are deemed commodities, which is likely since most crypto tokens (when not securities) are broadly considered commodities under U.S. law. While the CFTC does not regulate spot trading of commodities (other than prohibiting fraud/manipulation), it could intervene if, say, derivatives on meme coins were offered or if there was egregious market manipulation in the spot market. So far, the CFTC has not been prominently involved in memecoin issues – largely because there are no formal futures or derivatives on these micro-cap tokens. That said, if Pump.fun or similar platforms were found to be facilitating manipulation (e.g. through “bots extracting MEV” or insiders rigging prices, as alleged in some Pump.fun lawsuits), the CFTC’s anti-fraud authority could conceivably come into play.

Meanwhile, the Financial Crimes Enforcement Network (FinCEN) focuses on anti-money laundering (AML) and illicit finance risks. FinCEN regulations require that any entity “engaged in the business” of exchanging or transmitting convertible virtual currencies register as a Money Services Business and comply with AML/KYC (Know-Your-Customer) rules. Pump.fun’s model is decentralized to an extent – users connect their own wallets and trades are executed on-chain – but the platform does take custody of funds momentarily via its bonding curve contracts and charges fees. Pump.fun’s operator (Baton Corporation Ltd.) could arguably be viewed as operating a crypto exchange or broker, just without formal user accounts. Notably, Pump.fun has no KYC procedures; users can trade anonymously, and reports indicate even minors have been using the platform. This lack of customer verification and the presence of tokens promoting “antisemitism, racism, and explicit content” on the site would raise red flags for FinCEN and other enforcement agencies if U.S. persons are involved. Facilitating unmonitored financial activity, even if centered on joke coins, can enable money laundering or sanctions evasion, which FinCEN vigilantly polices. As of 2025, there’s no public indication that FinCEN has targeted Pump.fun, but the platform’s “reported lack of KYC/AML checks… could attract [regulatory] scrutiny” especially if illicit use is detected. In short, Pump.fun sits in a legally precarious position in the U.S. – it has thus far benefited from the SEC’s hands-off approach to memecoins, but it still operates in a regulatory grey zone. Any evidence of fraud, terrorist financing, or involvement of retail investors being misled could quickly invite enforcement by the SEC (if securities laws are triggered), the CFTC (for fraud/manipulation), the Federal Trade Commission (FTC) (for deceptive marketing), or even criminal prosecution by the Department of Justice for wire fraud or money laundering violations. Indeed, the SEC staff explicitly reminded the public that “fraudulent conduct related to meme coins may be subject to enforcement or prosecution by other federal or state agencies under other laws,” even if securities laws don’t apply.

Legal Challenges and Lawsuits in the U.S.

The legal risks of Pump.fun’s model have already materialized in the form of private lawsuits. In January 2025, multiple class-action suits were filed in U.S. courts on behalf of aggrieved Pump.fun users. One prominent case [Aguilar v. Baton Corporation Ltd, d/b/a Pump.Fun (No. 1:25-cv-00880 CM)] in the Southern District of New York alleges that Pump.fun and its founders orchestrated a massive “pump-and-dump scheme” that allegedly extracted nearly $500 million from users by promoting and selling unregistered securities (meme coins) without proper disclosures. The complaint claims Pump.fun essentially functioned as a hub for unregistered securities sales, partnering with influencers to hype tokens and “create the illusion of legitimacy” while knowing most users would ultimately lose money. It specifically cites tokens like FRED, FWOG, and GRIFFAIN (mentioned earlier) as examples where Pump.fun’s team and promoters allegedly ran coordinated campaigns to inflate the token prices – with professional artwork, social media blitzes, and even exchange listings – only for insiders to dump their holdings after retail demand was attracted. The lawsuit argues that all Pump.fun-launched tokens shared the same speculative profile by design (due to the platform’s standardized bonding curve mechanism) and thus all should be deemed securities under the Howey test. By failing to register these token offerings and by omitting basic investor protections (like KYC, risk disclosures, etc.), Pump.fun and its principals would be in violation of Sections 5 and 12 of the Securities Act if the court agrees the tokens were securities.

Another lawsuit (Carnahan v. Pump.fun) filed around the same time centers on the PNUT coin crash – it accuses the platform of enabling fraud in that specific token’s launch, which saw a $1B→$0 swing and heavy investor losses. Additionally, an even broader complaint reportedly invoked the Racketeer Influenced and Corrupt Organizations (RICO) Act in mid-2025, alleging that Pump.fun (in concert with Solana insiders) operated a kind of “meme coin casino” and even coordinated bot-based exploitation of users via maximum extractable value (MEV) on the network. While the RICO allegations are unverified and venture into conspiracy territory, their existence highlights the perception among some observers that Pump.fun’s operations may have crossed into organized, intentional misconduct rather than just a neutral platform. Pump.fun’s founders have denied these accusations – co-founder Noah Tweedale said “we don’t want people to lose money… It doesn’t benefit us by any means”, maintaining that the goal was a fair playing field for traders. Nonetheless, the legal battles are now underway, and they raise novel questions: can a platform be held liable for the aggregate effect of many users losing money on tokens it facilitates? Are meme coins per se securities if marketed with moonshot rhetoric, despite the SEC’s general stance? These cases could set important precedents if they proceed. At minimum, they have put Pump.fun on the radar of regulators and shown that investor protection laws – including class-action remedies – are being tested against the memecoin phenomenon.

Regulatory Response and Enforcement in Europe (EU MiCAR, ESMA, AMLD)

Across the Atlantic, European regulators have approached the crypto–meme coin boom within a rapidly maturing regulatory framework, primarily through the Markets in Crypto-Assets Regulation (MiCAR). Adopted in 2023, MiCAR introduced a unified regime for crypto-asset markets across the EU, with its provisions entering into force in stages: rules for asset-referenced and e-money tokens took effect in June 2024, while the broader framework governing crypto-asset service providers (CASPs) — including trading platforms such as Pump.fun — became fully applicable from December 30, 2024. Together, these measures establish a comprehensive regulatory regime for crypto assets that are not traditional securities. 

Under MiCAR, most meme coins on Pump.fun would be categorized as generic “other crypto-assets” (as opposed to asset-referenced tokens or e-money tokens). This categorization carries specific compliance obligations: any offer of such tokens to the public in the EU or any listing on EU trading platforms must be accompanied by a compliant crypto-asset whitepaper. The whitepaper must disclose detailed information about the token’s features, the issuer or project team, the intended use or roadmap, and all relevant risks – including warnings about potential loss of value, volatility, illiquidity, and lack of guarantees. Additionally, it must also include disclaimers that no EU regulatory approval is provided and that investors could lose all their money. In essence, MiCAR attempts to impose on crypto token offerings a documentation standard somewhat analogous to a lite prospectus. If Pump.fun or a user on Pump.fun were to market a new meme coin to EU residents, MiCAR technically requires the publication of such a whitepaper and adherence to its transparency rules. Non-compliance can result in regulatory sanctions or fines on the issuer.

Pump.fun’s current model does not align well with MiCAR’s requirements. Tokens on Pump.fun can be created without any prior authorization by anonymous individuals in minutes, with no formal whitepapers or risk disclosures prepared. There is a question of who the “issuer” is in Pump.fun’s context – the platform provides automated tools to generate tokens, so EU regulators might deem Pump.fun itself to be facilitating issuance and thus potentially a co-issuer or at least a liable intermediary if EU users are targeted. This could put Pump.fun in the crosshairs of European authorities for non-compliant token offerings post-MiCAR. In addition to that, MiCAR has market abuse provisions similar to those for traditional financial markets. It explicitly prohibits market manipulation and insider trading in crypto-assets. Activities like pump-and-dump schemes, wash trading, or insider dumps that might be occurring on platforms like Pump.fun are outlawed under these rules. The European Securities and Markets Authority (ESMA) and national regulators are empowered to monitor and enforce these market integrity rules, including by analyzing on-chain data and trade patterns. So, if a Pump.fun coin were found to be manipulated and EU investors were harmed, EU regulators could pursue enforcement actions for market manipulation under MiCAR’s framework.

Furthermore, the EU’s existing Anti-Money Laundering directives (AMLD) impose KYC and anti-money-laundering obligations on crypto service providers. MiCAR aligns with AMLD (specifically AMLD5 and the upcoming AMLD6/AMLR) in the sense of expecting that crypto-asset service providers implement customer due diligence and report suspicious transactions. Pump.fun’s lack of any identity checks is a glaring non-compliance if it were deemed to be offering services (like exchange or wallet services) on EU territory. Even if Pump.fun has no legal entity in the EU, European regulators have shown willingness to put unregistered overseas crypto platforms on notice or block access to protect consumers. Notably, the UK – now outside the EU – did issue a warning against Pump.fun (as discussed below). Moreover, the EU’s new Digital Services Act (DSA) could indirectly affect Pump.fun’s marketing approach. The DSA requires online platforms to curb misinformation and deceptive practices; if Pump.fun or its users are aggressively promoting tokens through spam or misleading posts on social media (like X/Twitter or Telegram), there is a regulatory interest in clamping down on that as well.

In summary, under EU law, many Pump.fun-launched meme coins would fall into a regulated category of crypto assets. Were Pump.fun or its users to seek European investors, they would face strict compliance hurdles: preparing EU-compliant whitepapers, avoiding any manipulative promotions, implementing AML/KYC if offering services, and possibly obtaining licenses as a Crypto-Asset Service Provider (CASP) (for example, operating a trading platform or exchange in crypto requires authorization under MiCAR). The costs and frictions introduced by these rules stand in stark contrast to Pump.fun’s freewheeling, anonymous meme market. It is likely that Pump.fun has (whether intentionally or by happenstance) mostly served non-EU markets so far to avoid immediate entanglement with MiCAR. Yet, European regulators are certainly aware of the memecoin trend and have the regulatory tools to act if needed. As MiCAR enforcement ramps up through 2025–2026, platforms of Pump.fun’s ilk will either need to geo-fence EU users or come into compliance (the latter being a formidable challenge for a platform predicated on quick, anonymous coin launches).

Legal Risks for Creators, Promoters, and Users

Beyond platform-level regulation, there are legal risks at the individual level for those creating, promoting, or even trading Pump.fun tokens. Token creators on Pump.fun who mislead investors could face liability for fraud. Even if the SEC does not treat the token as a security, the U.S. Federal Trade Commission (FTC) or state attorneys general could prosecute egregious cases as fraudulent or deceptive schemes. For instance, if a developer promises that a coin is backed by some project or will have a certain use, but knows these claims to be false, that’s classic fraud. There have been instances in the wider crypto world of criminal charges for “rug pulls” – developers who raised funds through tokens and absconded. Pump.fun’s anonymity might protect some bad actors from being caught, but it also means no formal protections for buyers; thus, those buyers may resort to civil suits if they can identify a promoter (as in the Hawk case, where investors sued the influencer behind the coin).

Influencers and celebrities who promote Pump.fun coins also tread into legally hazardous territory. In the U.S., touting investment products can trigger securities promotion rules (for registered securities) or at least FTC truth-in-advertising rules. We’ve seen the SEC charge celebrities like Kim Kardashian for unlawfully promoting crypto tokens without disclosure (that was for EthereumMax, a different token) as a violation of securities anti-touting provisions. If the SEC considers Pump.fun coins non-securities, those specific rules might not apply, but an influencer could still be liable for garden-variety fraud if they knowingly hype a token they intend to dump. In Europe, consumer protection laws and unfair commercial practice regulations could similarly come into play if celebrities misrepresent the nature or risks of a token. The reputational risk is also significant: some celebrities involved in meme coins have faced public backlash and damage to their brand when the coins crashed or were seen as cash-grabs. Business Insider, for example, chronicled how a “shady hustler” in Dubai orchestrated deals with celebrities to launch meme coins, which turned out to be mostly self-enriching scams, tarnishing those celebrities’ images.

For everyday traders, the primary legal risk is not liability but rather lack of protection. Pump.fun users have virtually no recourse if they fall victim to a rug pull or manipulation. Unlike regulated stock markets – where there are disclosures, potential restitution funds, or at least regulators who might prosecute fraud and help victims recover assets – in the meme coin world a duped investor is usually on their own. The recent class-action suits are an attempt by users to band together and seek remedies, but such cases are hard to win and even harder to enforce (especially if defendants are overseas or pseudonymous). Pump.fun’s terms of use (if any) likely disavow responsibility for losses. And since trades are on-chain and irreversible, a mistaken transaction can’t be unwound. Users also risk running afoul of laws inadvertently: for instance, if a Pump.fun token they trade is later deemed a security, their trading of it could have been an illegal unregistered transaction (though enforcement against small retail traders would be unlikely). Additionally, there are tax implications – while not a legal “risk” in the punitive sense, traders must be aware that buying and selling meme coins are taxable events, considering that the IRS treats cryptocurrency as property; accordingly, many Pump.fun users could face tax compliance issues or liabilities if they do not report their (often short-term) capital gains. Given the large 2024–2025 swings, some traders might owe taxes on paper gains from successful trades even if they subsequently lost money on later trades – a complexity that savvy users need to manage.

Enforcement Actions and Global Outlook

To date, enforcement actions specifically targeting meme coins have been limited, but there are signs this could change. In the United Kingdom, the Financial Conduct Authority (FCA) formally placed Pump.fun on its Warning List on 3 December 2024, stating the firm “may be providing or promoting financial services or products without our permission” and advising consumers to avoid dealing with it. The UK, which has been tightening crypto promotions rules, was signaling that Pump.fun’s activities were on its radar, especially if UK consumers were involved. This kind of public warning can precede more serious action (such as ordering internet service providers to block the platform, or coordinating with other agencies if any UK laws were broken). Undoubtedly, the FCA was concerned by reports of Pump.fun’s unethical trading activity and lack of moderation, such as coins with hate content, and by the high risk of consumer harm.

In the U.S., while the SEC’s February 2025 statement gave a temporary reprieve to pure meme coins, the mounting scale of the memecoin market and associated losses makes some form of crackdown likely. Industry observers have predicted that regulators will eventually step in, given the “amount of money flying around and the level of risk to traders”. This could take different forms: if not through securities law, perhaps through classifying habitual meme coin trading under gambling law. Notably, some experts have argued that memecoins are essentially “unregulated gambling” and suggested that gambling regulators or state gaming boards might be more suited to oversee them. There have been hints that certain U.S. states are examining whether speculative crypto trading should be treated under gambling statutes. If that idea gains traction, platforms like Pump.fun could be required to obtain gaming licenses or comply with strict gambling regulations when operating in those jurisdictions – a development that would dramatically alter the landscape.

Another vector for enforcement is general fraud and consumer protection law. If a memecoin launch involves outright deception (for example, a developer faking their identity or use of funds, or a platform making misleading claims about safety), agencies like the FTC, the Consumer Financial Protection Bureau (CFPB), or state attorneys general could bring cases. It has been seen how the U.S. Department of Justice charged certain fraudulent crypto schemes, though usually involving bigger scams than a meme coin. It is conceivable that a particularly egregious Pump.fun incident (say, a token that stole users’ Solana deposits or a coordinated insider dump with proof of intent) could trigger criminal wire fraud or commodities fraud charges. International cooperation is also possible: since crypto is borderless, global bodies like IOSCO (International Organization of Securities Commissions) have discussed coordinated approaches to crypto-asset risks. If memecoins are seen as a systemic consumer risk, we might see more countries issuing bans or guidance.

In summary, the regulatory outlook for Pump.fun and its meme coins is increasingly cloudy. U.S. regulators currently take the stance that genuine meme coins are outside securities laws, but that does not equate to approval – it simply shifts the focus to other laws (fraud, AML, gambling). The ongoing private lawsuits in the U.S. could also surface facts that spur regulators to act, especially if they reveal internal wrongdoing. European regulators under MiCAR now have a clear framework that would render most of Pump.fun’s operations non-compliant within the EU, suggesting that the platform will either avoid European markets or eventually face enforcement action if EU investors remain involved without adequate protections. Other jurisdictions like the UK and possibly some Asian regulators (Singapore, etc.) are alert to the craze and likely to clamp down if memecoin trading infects their retail markets.

Ultimately, the legal environment is racing to catch up with the technological reality that Pump.fun represents: finance gamified as viral internet culture, with all the attendant risks. Pump.fun’s founders have portrayed the platform as merely providing a fun, equal-access playground for meme trading, implying a caveat emptor philosophy. Regulators, on the other hand, see vulnerable retail investors potentially being misled or harmed at large scale. The coming years will determine whether Pump.fun and similar platforms can adapt to the new compliance expectations or whether the golden age of unregulated meme coin mania will meet an abrupt end through regulatory intervention.

Conclusion

The rise of Pump.fun exemplifies the astonishing, and at times absurd, trajectory of the meme coin phenomenon. Economically, Pump.fun turned the creation of tokens into an internet meme-driven mass pastime – generating unparalleled trading volumes and a frenetic microcosm of highly volatile markets. This has yielded some short-term windfalls and a great deal of volatility, but also heavy losses and little in the way of lasting value creation. For every novelty coin that briefly captures the imagination (and wallets) of speculators, countless others fade into oblivion, making the meme coin arena a Darwinian marketplace where only the most viral (or shrewdly manipulated) thrive momentarily. Legally, Pump.fun’s success has outpaced the existing frameworks meant to safeguard investors. In the United States, meme coins straddle an unusual line: not deemed securities in general, yet still posing enough harm to prompt class actions and calls for oversight via other means. While the SEC staff’s 2025 statement temporarily clarified that many meme coins fall outside securities laws, this remains guidance rather than a binding rule — leaving the door open for future reinterpretation. In Europe, the advent of MiCA signals that the free-for-all days are numbered – at least for any platform that touches European users, strict transparency and market conduct rules now apply. Across jurisdictions, the message is converging that even if meme coins start as a joke, the money invested and lost in them is very real, and thus regulators will not treat this as harmless “fun” for long.

Pump.fun’s story thus far highlights a clash between innovation and exuberance on one hand, and investor protection and law on the other. The platform tapped into a zeitgeist of 2024–2025 – a mix of internet culture, FOMO trading, and distrust of gatekeepers – and in doing so, it pushed the boundaries of what an unregulated market can achieve (both good and bad). As Pump.fun moves forward, it faces the dual challenge of sustaining user interest (in a now-saturated meme coin market) and navigating an increasingly complex regulatory maze. The economic sustainability of its model is questionable if users burn out from repeated losses, and the legal sustainability is equally in doubt if courts or regulators decide to clamp down hard.

From an academic perspective, the Pump.fun phenomenon offers rich lessons. It underscores how liquidity and speculation can be instantly conjured in the crypto era – millions of dollars chasing assets spun up in seconds – but also how this can amount to a massive zero-sum game fueled by narrative and emotion. It raises the question of how to draw lines between caveat emptor entertainment and activities needing regulatory guardrails, especially when the line can shift depending on one’s perspective (the SEC says meme coins are not securities, yet many investors clearly buy them expecting profit). It also highlights the global regulatory arbitrage at play: a platform can explode in growth precisely by exploiting gaps in the regulatory fabric (e.g. launching in a jurisdiction with lax rules and reaching users everywhere), forcing regulators into a reactive stance.

As of late 2025, we are likely at an inflection point. Pump.fun’s continued growth – exemplified by its $1 billion revenue days and multi-billion token supply – cannot fly under the radar much longer. Enforcement actions, stricter rules on crypto marketing, and possibly new laws treating certain token trading as gambling all loom on the horizon. For participants in this memecoin casino, the advice remains timeless: “Do Your Own Research” (DYOR) and understand that what goes up on a viral tweet can come crashing down just as fast. Meme coins may very well persist as a quirky corner of the crypto landscape, but the wild west environment that Pump.fun cultivated will inevitably be tempered by the twin forces of market maturation and legal intervention. In the end, the Pump.fun saga is a striking case study in innovation outpacing regulation – a reminder that in finance, as in other domains, fun and frenzy often ride together, until reality catches up.

Sources

• Ars Technica – Teen creates memecoin, dumps it, earns $50,000. Ars Technica, 2024.
• Bambysheva, Nina - "Inside the wild money machine fuelling crypto's stupidest bubble". Forbes Australia. 
• Bloomberg – Pump.fun, Crypto’s “4chan,” Attracts Iggy Azalea and 1 Million Memecoins. Bloomberg Crypto, 2024.
• Business Insider – Inside the Shady World of Celebrity Meme Coins., 2025.
• CryptoSlate – Pump.fun Hit With Federal Lawsuit Alleging $500 Million Pump-and-Dump Scheme, Jan 2025.
• Dale, Brady - "Pump.fun token launch". Axios.
• Decrypt – What Is Pump.fun? The Solana Meme Coin Factory (revenue and token counts), Jan 6 2025.
• Fortune – Pump.fun Raised $600 Million in 12 Minutes. Fortune, 2025.
• NBC News – Memecoins like Fartcoin riding Trump’s victory
• O2K Tech Blog – MiCA Regulation: What It Means for Crypto in the EU, 2024.
• O2K Tech Blog – Pump.fun: Growth, Legal Risks & Tax Impacts Explained (U.S. lawsuits, SEC context), 2025.
• PC Gamer – 13-Year-Old That Made a Killing Creating a Crypto and Then Dumping It Gets “Revenge Pumped,” Family Doxxed, and Even Dognapping Rumours Emerge., 2024.
• The Defiant – Pump.Fun Token Graduation Rate Plummets (token statistics)
• U.S. Securities and Exchange Commission, Division of Corporation Finance. Staff Statement on Meme Coins. Feb 27 2025. https://www.sec.gov/newsroom/speeches-statements/staff-statement-meme-coins 
• Weiss, Ben - "Popular crypto site Pump.fun raised $600 million in 12 minutes—a sign a notorious era is back". Fortune Crypto.
• Wired – The Memecoin Shenanigans Are Just Getting Started, Jan 2025. (References include regulators, gambling law, Iggy Azalea quotes, and Chris Dixon remarks.)
• Wired – They Went After the Hawk Tuah Crypto Promoters. Now They’re Suing Pump.fun, Jan 2025. (Details on class actions and UK FCA warning.)
• Yaffe-Bellany, David – “A Digital Coin Based on Baby Trump? Yup.” The New York Times, 2024.

‍