Solidus Labs Reveals Massive Token Fraud on Solana’s PumpFun Platform

98.6% of tokens on Pump. Fun was a scam, with only 97,000 holding over $1,000 in liquidity.

TRUMP and MELANIA tokens crashed by 87% and 97% as insiders profited over $100 million.

93% of Raydium liquidity pools showed signs of soft rug pulls with median losses of $2.8K

According to a new report from Solidus Labs, nearly all tokens are deployed on the Pump. Fun platforms are linked to fraudulent activity. Based on the findings, 98.6% of all the over seven million tokens created on Pump Fun after 2024 were rug pulls or manipulative pump-and-dump schemes. These results indicate an increasingly severe state of token security and malicious activity on the Solana blockchain.

Pump. Fun allows users to pump crypto tokens through Solana, which has become a preferred blockchain for high-volume issuance of crypto tokens because it has low fees and runs fast. Despite these technical advantages, however, bad actors seem to have leveraged the platform's ability to deploy low liquidity or deceptive tokens in such quantities to undermine investor confidence and raise regulatory worries.

Low Liquidity and High Risk on Solana’s Token Platforms

According to Solidus Labs’ numbers, of the tens of millions of tokens issued on Pump. Fun, less than 97,000 remained liquid above $1,000. The report notes that most of these tokens had a poor liquidity level that did not enable them to support legitimate trading. Hence, they were vulnerable to rapid value collapse. The biggest rug pull detected on the platform is $1.9m, associated with an MToken token.

Deceitful market practices have especially impacted the meme coin market. Tokens pushed under recognizable names such as TRUMP and MELANIA experienced a sharp 87% and 97% drop-off, respectively. These projects were first backed by public endorsements that were later found to be taking money from insiders buying tokens before they hit the markets at over $100 million.

Raydium and Broader Ecosystem Risks

The issue extends beyond Pump. Fun. On the decentralized exchange Raydium, Solidus Labs flagged that liquidity pools, which are flagging 93% of liquidity pools, exhibit soft rug pull behavior. This covered roughly 361,000 pools with median rug pull losses of $2,800. These results indicate that fraudulent activity is systemic in decentralized platforms that host Solana-based token transactions.

Even as the crypto industry experiences growth, scams and asset misappropriation are challenging. In its February report, Merkle Science indicated that $500 million had been stolen through scams and rug pulls in 2024.

Regulatory Scrutiny Intensifies

The increasing magnitude of fraud that surrounds crypto has drawn regulators’ interest. In March, the U.S. Securities and Exchange Commission created a Cyber and Emerging Technologies Unit designed to curtail abuse in blockchain markets.

In April, the SEC sued Meteora in a class-action lawsuit for a $69 million rug pull with the MEME meme coin. Amidst this fun under the spotlight and rising regulatory pressure, blockchain ecosystems might have to be tougher to ensure user security from widespread fraud.