Pump.fun Co-Founder: Tech Altcoins Are Just Meme Coins With VC Exit Liquidity

In a 3 February 2025 post, Pump.fun co-founder Alon Cohen claimed that most tech-focused altcoins offer the same value proposition as meme coins but with significant drawbacks.

Cohen said these altcoins have low circulating supply, high fully diluted valuations, and the influence of venture capitalists who often use retail traders as exit liquidity.

The comments came in response to a social media post. It suggests that Pump.fun’s meme coin launch platform disrupted the altcoin price cycle. He dismissed the claim, arguing that the platform existed months before the altcoin market downturn in April 2024.

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Cohen: Retail Investors Were Scarred From Last Cycle

“Retail was burned too hard last cycle to just come back to invest in the ‘future of finance,'” Cohen said. He attributes the altcoin crash to waning enthusiasm from everyday investors.

He added that most people with regular jobs are not interested in complex tech narratives but rather in personal fulfillment and the opportunity to make money while enjoying the process.

His comments highlight the growing divide between altcoin investors who prioritize technological utility and traders who engage in speculative investing without concern for a project’s long-term viability.

I highly doubt this guy is posting in good faith but I’ll respond to this anyway since there seems to be a lot of confusion

first of all, pump fun launched in January 2024, not April

second, pump fun is just a product. It’s a reflection of market demand. If pump fun didn’t…

— alon (@a1lon9) February 3, 2025

Launched in January 2024, Pump.fun capitalizes on the memecoin trend fueled by online communities across X (formerly Twitter), Reddit, Telegram, and Discord.

The altcoin market was booming at the time, with the Total3 indicator on TradingView—an index measuring the total crypto market capitalization excluding Bitcoin and Ether—peaking at approximately $788 billion in March 2024.

However, the market experienced a sharp decline in April 2024. Altcoin prices barely recovered in November following a historic cryptocurrency rally sparked by Donald Trump’s re-election in the US.

Meanwhile, analysts argue that the crypto market has become oversaturated. There are too many projects competing for limited investor attention. Despite this, altcoins backed by institutional investors generally outperformed those without such support throughout 2024.

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Pump.fun Faces Legal Action Over Alleged Trademark Infringement

Pump.fun has recently come under legal scrutiny. Law firms Burwick Law and Wolf Popper LLP issued a cease and desist letter, accusing the platform of unauthorized use of their intellectual property.

The firms also filed a class-action lawsuit. Allegations say that Pump.fun facilitated the creation of over 200 tokens that infringe upon their trademarks and falsely impersonate their brands.

Among the most controversial tokens is ‘Dog Shit Going NoWhere’ (DOGSHIT2). It was allegedly deployed on the platform without their consent.

Burwick Law and Wolf Popper LLP have firmly stated that they are not affiliated with the creation of these meme coins. Moreover, they are pursuing legal action to safeguard their intellectual property.

Furthermore, the lawsuit alleges that Pump.fun has the capability to remove these unauthorized tokens. But the platform has refused to do so. This is despite the potential financial and legal consequences for investors.

Beyond intellectual property violations, the cease and desist letter also accuses Pump.fun of facilitating the creation of tokens aimed at harassing individuals involved in the lawsuit.

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