Solana Pump fun Deposits $28M SOL Amid Class Action Lawsuit

Pump.fun, a Solana-based meme coin launchpad, recently deposited 116,055 SOL, valued at $28 million, to cryptocurrency exchange Kraken. The transaction, reported by Lookonchain, comes amidst an ongoing class action lawsuit targeting the creators of Pump.fun for allegedly exploiting users and violating securities laws.

Pump fun’s Solana Deposits and Trading Activity

Over time, Pump.fun has grown to be one of the largest players in the Solana space having launched over 6 million tokens. According to Lookonchain, Pump.fun has made a total of 1,901,332 SOL deposits to Kraken, which is roughly equal to $386.8 million. Furthermore, the platform has sold SOL worth 264,373 which equates to $41.64 million in USDC.

However, there has been a lot of activity on the platform, and there are some concerns regarding its operations. 

According to the sources, Pump.fun generated $572 million in fees via its advanced token creation tools with alleged misuse of issuing volatile and unregistered tokens by some users. This financial situation has only added to the spotlight as Pump.fun is now facing a federal class action lawsuit.

Class Action Lawsuit Against Pump fun

Two law firms Burwick Law and Wolf Popper LLP filed a class action lawsuit against Pump.fun on behalf of investors who had been impacted. The suit, filed in the United States District Court for the Southern District of New York, alleges the platform preys on its users and promotes hate speech.

The lawsuit stated that Pump.fun permitted the sharing of abusive content regarding race, torture, and adult content, presumably to generate revenue from transaction fees. Plaintiff Kendall Carnahan also alleged that the Peanut the Squirrel platform offered unregistered securities and thereby violated securities laws.

The suit also claims that Pump.fun targeted unsuspecting investors with the aim of making them invest in volatile tokens which was detrimental to their investment. However, several users claimed to have made millions, however, only 0.41% of the wallets earned over $10000 in profit as per Dune Analytics.

Controversy Surrounding Operations

Founded in January of 2024, Pump.fun has come under fire for reportedly making a select few users profiting while the majority lose money. 

The platform had also been known for its live streaming service, which has since been pulled, with people performing dangerous acts like pretending to commit suicide.

The analysis revealed that 289 wallets connected with Pump.fun have made over a million dollars, whereas the majority of investors got little to no profit or even lost some of it. Some of the critics have claimed that the platform token creation tools were used in a wrong way and that is why there is legal battle at the moment.

Solana Price Rally Looming?

Pump.fun’s significant transactions involving Solana have drawn attention to the asset’s price movements. Solana’s price is currently consolidating in the $230–$250 range after reaching a high of $290. Analysts indicate that this consolidation phase is critical for determining the next price trend.

Technical indicators suggest that Solana’s price has support at $225, with $260 and $290 acting as immediate resistance levels. A breakout above $290 could potentially push Solana’s price to the $360 mark. The Relative Strength Index (RSI) currently stands at 55.65, signaling moderate bullish momentum.

Additionally, the Chaikin Money Flow (CMF) value of +0.05 indicates continued capital inflows, supporting the possibility of further price gains.