Pump.fun and founder Alon Cohen’s X accounts were suspended for rule violations, sparking speculation of an SEC probe.
Pump.fun, a memecoin launchpad based on Solana, was suspended from Elon Musk’s X platform, as was its originator, Alon Cohen. X did not provide a specific justification for the violation of the rules other than the standard disclosure. Intriguingly, the X platform has suspended accounts for other meme coin services besides these two.
Will the Memecoin platform Pump.fun be subjected to scrutiny?
The Securities and Exchange Commission (SEC)’s potential involvement in allegations of illegality in Pump.fun’s operations has been the subject of speculation following the recent suspension of accounts for the Solana-based memecoin platform. The primary platform is currently fully operational despite the controversy. It is intriguing that the suspension occurred within two weeks of the Solana meme coin platform raising $1 billion.
Other accounts suspended include those associated with GMGN, Bloom Trading, and BullX. Additionally, crypto Twitter anticipates that the suspension is because most of the accounts were associated with automation infrastructure or trading tools. Additionally, they believe that the most recent assault may be a component of an internal enforcement operation by the X platform.
Several X users have conjectured that the account suspensions are associated with using third-party application programming interfaces (APIs), which X prohibited in January 2023. Additionally, some individuals proposed that the platforms utilized external APIs to circumvent the exorbitant expenses associated with X’s internal API, which requires an annual subscription of $60,000.
In an update posted on Telegram, GMGN confirmed the suspension of its X account and stated that it was “actively appealing the decision and working to restore the account as soon as possible.”
Previous Issues with the Solana Memecoin Platform
Pump.fun has been criticized for facilitating pump-and-dump schemes and scam tokens despite the Solana blockchain being at the forefront of a significant memecoin mania since 2024. Consequently, the trading volume of meme coins on the Binance Chain recently surpassed that of Solana.
The platform has also elicited various responses due to its ability to streamline the process of generating meme coins. Pump.fun, which hosts some of the most popular meme coins, was presented with a proposed class-action lawsuit in January. The lawsuit accused the platform of offering and selling “highly volatile” unregistered securities, allegedly accumulating nearly $500 million in fees.
