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- PumpFun co-founder Alon Cohen denied rumors about launching a token using a Dutch auction model in partnership with centralized exchanges.
- The platform faces legal scrutiny over allegations of facilitating unregistered securities trading through speculative meme token launches.
Recently, the crypto community was abuzz with rumors that PumpFun, a Solana-based token launch platform, would be releasing its own token using the Dutch auction model.
Furthermore, reported to be supporting the system is the platform’s cooperation with various centralized exchanges (CEX). This rumor rapidly went across several platforms and social media, generating different speculations.
But Alon Cohen, PumpFun co-Founder, firmly denied the rumors before the community could get carried away by the euphoria. He advised users to rely just on official statements from the platform team since the information that is being shared is not true.
This statement definitely begs the issue: Is PumpFun truly intending to release a token in the future if not now? Alternatively is this only early conjecture?
Exclusive: Pumpfun, a token launch platform on Solana, will release token and conduct public offerings, and will adopt the Dutch auction model. It is currently working with CEXs to develop the system. pic.twitter.com/04L7KgTZxR
— Wu Blockchain (@WuBlockchain) February 9, 2025
PumpFun in the Legal Spotlight
PumpFun must deal with a more pressing issue among the widespread speculating. Alleging that PumpFun has helped unregistered securities be traded as meme tokens, Burwick Law and Wolf Popper LLP have filed a class action complaint against the platform. For PumpFun especially as more and more people doubt the validity and openness of its economic model, this lawsuit presents a significant obstacle.
Moreover, the community has harshly attacked the platform. Many speculative tokens started on PumpFun have managed to achieve values of millions of dollars, although less than 10% of the total participants benefit from the gains earned.
This scenario begs a serious doubt regarding whether PumpFun is really a unique platform or only a playground for large companies to profit from.
Dutch Auction Model: Solution or Just a Gimmick?
Adoption of the Dutch auction process in the introduction of the PumpFun token is one of the primary topics of the circulating rumors. This approach lets the token price be calculated depending on the first highest bid; thereafter, the price declines gradually until it finds a point of equilibrium between demand and supply.
Since this approach lets more individuals pay a fair price, theoretically it can distribute tokens more fairly. In reality, though, big investors who can influence the auction’s momentum have still the ability to manipulate this approach.
Given PumpFun’s history of past token distributions, many are dubious whether this approach will truly help the larger community or only serve the top players.
What Does the Future Hold for PumpFun?
Official denials from PumpFun co-founders suggest a token launch could be a misinterpretation or even a subtly veiled marketing tactic meant to measure market reaction.
Still, the continuous lawsuit poses a significant threat to the sustainability of the platform. This reminds the crypto community that not all of the excitement in the world of digital assets is worth trusting.
