Pump.fun Comes Under More Scrutiny as Chainalysis Expands Coverage

Solana memecoin platform Pump.fun has been added to blockchain data firm Chainalysis' coverage in an attempt to enhance compliance and security within the ecosystem.

"Today Chainalysis extended our Solana coverage to include every Solana token in KYT and Reactor," director of product Matthew Wilson said on LinkedIn. 

Wilson unexplained that the move will assist governments in investigating scams in the ecosystem more effectively.

"From the moment a SPL contract is deployed, Chainalysis offers complete alerting, exposure and tracing," he said. "This means that exchanges can list memes IMMEDIATELY and with full compliance coverage. And governments can look into the scams and rugpulls."

Functioning as a memecoin launchpad, Pump.fun allows anyone to create a memecoin with just 0.02 SOL, enabling users to create and experiment at an affordable cost.

By making sure every token undergoes a fair launch with no presale and team allocation, Pump.fun ensures token safety by preventing rug pulls.

The platform generates revenue from charging a 1% fee on trades and a 2 SOL fee when coins receive ample liquidity to be listed on Raydium, a decentralized exchange (DEX) on the Solana blockchain.

Dune data shows that over 4 million memecoins were deployed via Pump.fun earlier this month. The platform also hit an all-time high of over $93 million in monthly revenue last month.

However, Pump.fun's success has been marred with controversy. In November, the platform's live-stream service was plagued with pornography, animal abuse, child abuse, suicide threats, and other illicit activities.

Animal Abuse, Suicide, Porn - Pump.fun Desperately Needs Regulation

Pump.fun, a booming memecoin platform, faces backlash for enabling extreme content, from exploitation to abuse, exposing crypto’s dark side

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Before long Pump.fun acknowledged the growing concerns about harmful and disturbing content on its platform and outlined steps to address the issue. The platform emphasized its commitment to ensuring user safety and stated that live streams will remain paused until a more robust moderation infrastructure is in place

Pump.fun Suspends Livestreams Indefinitely Amid Escalating Content Concerns

The decision follows a wave of backlash over the platform’s failure to curb increasingly harmful and disturbing content.

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Pump.fun simplifying memecoin creation has been celebrated by the community and consequent activity has certainly been boosted. Last month, Solana saw its user base top 6.3 million active addresses, pushing SOL to an all-time high of $264.18.

However, with memecoins contributing to the strength of Solana, the question of sustainability is becoming an increasing concern and with more eyes monitoring the likes of Pump.fun, the memecoin fun might be shortlived.