Max Burwick has called Pump.fun “the evolution of MLM scams,” accusing it of exploiting investors—and now his law firm is preparing a lawsuit.

On Jan. 15, Max Burwick—founder and Partner at Burwick Law—voiced strong criticism against platforms like Pump.fun as examples of what he calls “the ultimate evolution of multi-level marketing scams, preying on human desperation and the digital attention economy.” 

He critiqued that these projects leverage the “digital attention economy” to reel people in—especially younger audiences or those facing economic hardship—and ensnare them in a cycle designed to enrich early insiders.

Pump.fun, according to Burwick, allegedly frames “exit liquidity” as a game—making light of the very real financial losses inflicted on late entrants.

Pump.fun is a decentralized platform on the Solana (SOL) blockchain that simplifies the process of creating and trading meme coins, aiming to make participation in the crypto market accessible to non-technical users.

Burwick didn’t hold back in taking shots at the platform, saying they were the antithesis of blockchain innovation. He says platforms like Pump.fun don’t embody the fundamental principles of transparency, fairness, and empowerment that crypto was originally built on.

Burwick reiterated that meme coins aren’t innovative in and of themselves but prey on addiction and youth. His comments come as Burwick Law picks up the gauntlet in a legal case involving Pump.fun, demanding accountability in company conduct within the crypto ecosystem. 

Pump.fun faces legal action

On Jan. 15, Burwick Law said that it has been working with individuals who lost considerable amounts of money to meme coins via rug pulls and misleading promises linked to the platform. The law firm has now made a website to help clients who lost millions of dollars in the fiasco. 

Burwick Law claimed Pump.fun hosted obscene and corrosive content displaying violence, racism, and antisocial behaviors. They attacked the anonymous creators of the platform and others in the meme coin ecosystem for luring day-to-day investors with false promises.

As of Jan. 15, the platform’s total revenue surpassed $422 million, with nearly $25 million generated in the last seven days alone, according to Dune Analytics.

Burwick Law contends that the meme coin launchpad offers little actual support for its users and instead facilitates rug pulls, where developers walk away with investor funds after raising capital. “As the system grows, early adopters cash out by dumping their holdings on later participants, effectively stealing from them,” Burwick remarked.

In November 2024, the platform suffered major backlash due to its live streaming feature. A user threatened to harm himself to promote their meme coin during a live broadcast, causing panic in the entire crypto community. While Pump.fun did acknowledge the damage done and changed its moderation policies, there were no talks about losses that investors suffered.

According to an analysis by Pump.fun wallet examiner Adam Tehc, only 0.4% of the 14 million wallets interacting with Pump.fun reported profits exceeding $10,000—highlighting the extent to which most users have suffered losses.

Max Burwick is not the only one who has a strong stance against the platform. On Jan. 15, Cosmo Jiang of Pantera Capital told Wire “that majority of meme coins launched through Pump.fun wind up nearly worthless”, sharing a sentiment similar to Burwick.

As the cryptocurrency market grows, so do the tactics of scammers aiming to exploit unsuspecting individuals. Pro XRP lawyer John Deaton has issued a stern warning about evolving crypto scams. Deaton urged users to exercise caution and vigilance in safeguarding their digital assets.

Crypto Scam Alert: John Deaton Warns Users Against Evolving Tactics

In a detailed post on social media, John Deaton highlighted the dangers of sophisticated crypto scams targeting new and experienced users. Deaton stressed the importance of never sharing sensitive information like seed phrases or passwords. These details act as the key to accessing a user’s crypto wallet and can lead to the complete loss of funds.

Deaton shared a personal story about a near-miss incident where scammers hijacked his home WiFi and attempted to trick him into revealing his login credentials. The attackers used fake emails and calls posing as customer support representatives. John Deaton described the moment as a critical learning experience. He emphasized that scammers often create a sense of urgency to manipulate their targets.

The Pro XRP Lawyer added, 

“What people need to understand is that, not only do the emails look official, but it creates a sense of urgency and fear. The email states that your funds are at risk and you need to take immediate steps to protect your funds or they could be lost forever.”

Amid the increasing wave of crypto scams, Pudgy Penguins NFT holders have become the latest target. Coingape recently reported that scammers are using deceptive Google ads to lure users to fake websites designed to steal wallet credentials. This incident highlights the growing sophistication of attacks in the Web3 space and the urgent need for heightened security measures.

Sophisticated YouTube Scams Target Crypto Enthusiasts

A recent cybersecurity report from Kaspersky uncovered a new scam involving the use of YouTube comments. Scammers post crypto wallet seed phrases, claiming to seek assistance in transferring funds. These comments appear under finance-related videos and often portray the scammers as naïve beginners.

When an unscrupulous individual attempts to access the wallet using the shared seed phrase, they find it contains cryptocurrency, often USDT. However, to withdraw these funds, a small fee in TRX tokens is required. Victims transferring TRX to the wallet for fees soon discover their tokens are automatically redirected to the scammer’s account.

Multi-Signature Wallets: The New Tool in Crypto Scams

The wallet used in these scams is typically a multi-signature wallet, which requires multiple approvals to authorize transactions. This setup makes it impossible for the would-be thief to move the funds, even after sending TRX for fees. Instead, their TRX tokens are immediately drained, leaving them empty-handed.

More so, John Deaton pointed out that these scams exploit human greed, turning opportunistic individuals into victims. He warned that such schemes are becoming increasingly common and urged users to remain vigilant.

John Deaton advised users to adopt robust security measures to protect their digital assets. He emphasized the importance of enabling two-factor authentication and verifying the authenticity of emails and links before clicking. Additionally, he reiterated the critical rule,

”NEVER share passwords or seed phrases.”

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.