Pump.fun faces criticism and suspicion following the launch of its cryptocurrency

The platform launched its token PUMP on July 12 and is under scrutiny due to price drops and fund management issues.

An alleged insider participated in the pre-sale of PUMP with 1 million USDC.

A whale moved USD 1.5 billion in PUMP, fueling fears of massive sell-offs.

Pump.fun, the flagship platform for creating memecoins on Solana, is facing intense scrutiny from the cryptocurrency ecosystem after the launch on July 12 of an initial coin offering (ICO) for its native token PUMP.

One of the first alarms that went off occurred on the same July 12, when the X account of Pump.fun explained a particular measure for the launch of its token:

During the next 48-72 hours, all tokens purchased through token.pump.fun or participating exchanges will be transferred to the participants. The tokens will initially be non-tradable and non-transferable while the distribution phase is ongoing. Once this phase is completed, the tokens will become tradable and transferable, and an announcement will be made regarding this.”

Pump.fun on X.

That decision to determine how users can manage their PUMP generated discontent.

Another aspect of the PUMP launch that fueled suspicions around its transparency was the distribution of the supply of that token.

As detailed by CriptoNotcias, of the total assigned to the ICO, which represents 33% of the total supply of 1 billion tokens, 18% was allocated to a fully awarded private sale, while 15% was reserved for the public sale.

However, only 12.5% of that 15% was offered during this first phase, leaving an unclear percentage without immediate distribution, raising questions about its fate.