Report Reveals 98% of Tokens on Pump.Fun Are Suspected Rug Pulls or Fraudulent Activities

A recent analysis conducted by Solidus Labs has highlighted the concerning prevalence of fraudulent activities on the Solana blockchain. It found that an astonishing 98.6% of tokens launched via Pump.fun are categorized as either rug pulls or schemes designed to artificially inflate token prices.

Since its launch in January 2024, Pump.fun has seen the issuance of over seven million tokens. However, only 97,000 of these tokens have managed to maintain a minimum liquidity of at least $1,000.

Pump.fun offers a user-friendly platform for creating new cryptocurrency tokens on the Solana blockchain, and it does so at remarkably low costs.

The most significant rug pull identified by Solidus Labs during this timeframe involved MToken and amounted to a staggering $1.9 million.

Despite the crypto sector’s evolution and recovery following significant events like the collapse of FTX, various hacks and scams remain prevalent. Malicious actors are stealing millions, often exploiting retail investors’ desire for quick profits.

The memecoin market epitomizes this issue, with tens of thousands of fraudulent tokens being generated daily. The excitement around memecoins peaked in January when then-President Trump mentioned his own TRUMP memecoin online. Soon after, First Lady Melania Trump promoted a memecoin named MELANIA, both of which have since plummeted by 87% and 97%, respectively. It has been reported that a group of insiders made over $100 million by acquiring these tokens before their public release.

In addition, Solidus Labs found that 93% of liquidity pools on the decentralized exchange Raydium, totaling 361,000 pools, displayed tendencies consistent with soft rug pulls, with an average loss of approximately $2,800 for victims.

A report published in February revealed that approximately $500 million had already been lost to rug pulls and scams within the current year.

The Solana blockchain has become especially attractive to fraudsters and criminals, primarily due to its almost nonexistent transaction fees and the speed at which new tokens can be launched.

Monitoring agencies have begun to intensify their scrutiny over the industry. In March, the SEC established a dedicated Cyber and Emerging Technologies unit aimed at detecting and preventing the misuse of innovations that could harm investors and erode trust in emerging technologies.

In April, the regulator took action by filing a class-action lawsuit against Meteora and associated individuals involved with the M3M3 meme coin, alleging that they orchestrated a rug pull that resulted in a loss of $69 million.