Pump.fun’s native token, PUMP, has been at the center of growing concern in late July 2025. Once celebrated for its quick traction in the Solana memecoin sector, it is now facing steep losses, legal complications, and growing investor distrust.
A sharp price drop, combined with an unfulfilled airdrop promise and mounting legal pressure, has turned market sentiment cold. Statements from the project’s leadership have failed to provide clarity, adding to the turmoil. What began as a community-driven initiative has shifted into a highly scrutinized case in the crypto space.
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ICO Gains Wiped Out as Token Drops Over 75%
PUMP’s price story has developed rapidly in recent days. After debuting at $0.004, the token climbed to a short-lived high of $0.0067 on July 16. This was the highest price the asset ever reached, but that high proved unstable. Within a few days, the price dropped below its launch level, erasing any early gains.
PUMP token had fallen under its ICO price and continued to slide, reaching $0.0028 by July 26. This marked a drop of about 30% in the last week and nearly 76% from the July peak. A few wallets holding 60–80% of the token supply had sold off heavily, triggering massive price pressure. A coordinated dump of 1.25 billion tokens from these large holders played a key role in this rapid decline.
Exchanges, including Binance and Bybit, become the exit points for private holders cashing out in large volumes. These sell-offs removed millions in value from the circulating supply and worsened the situation for retail investors still holding their positions.
Delayed Airdrop Turns Sentiment Negative
Investor trust was further shaken on July 24 during a live stream. Co-founder Alon Cohen said the long-promised airdrop would not take place “anytime soon.” While he stressed the team’s new focus was on increasing trading volume and growing the ecosystem, the lack of a timeline created immediate backlash.
The token price fell by 12% shortly after his remarks. Cohen’s vague stance only added to suspicions that prior commitments were being quietly pushed aside. Pump.fun later introduced a 30-day trading volume program to reward activity with token incentives. This caused a temporary bump in price, reaching 17%, but the rebound didn’t last. Many saw the rewards system as an attempt to divert attention rather than a solid replacement for the delayed airdrop.
The absence of eligibility guidelines for the airdrop further fueled frustration. Investors complained of a lack of transparency and a growing sense that Pump.fun’s leadership was losing direction. Confidence began to unravel as selling pressure rose in the following days.
Legal Pressure Adds to Volatility
The situation escalated as legal filings entered the picture. A class-action lawsuit in the Southern District of New York accused Pump.fun and its associates – including Solana Labs and the Jito Foundation – of operating without registration and misleading users. The amended complaint filed in late July pointed to $5.5 billion allegedly extracted from users under false pretenses.
The suit seeks to void token transactions and secure compensation for affected holders. These legal moves have cast doubt on the legitimacy of the entire project, pushing the token further down.
On-chain data also shows continued outflows from top wallets, matching reports of early investors exiting their positions. This has left the market in a fragile state, with little support at the current price levels. Analysts tracking wallet behavior noted that sell-offs were concentrated but impactful, as many investors looked for safer assets in the wake of mounting losses.
Read also: Pump.fun $500M Lawsuit Escalates
