Pump.fun Co-Founder Refutes $436 Million Cash-Out Allegations, Labels Them as ‘Treasury Management’

Summary:
Pump.fun co-founder, Sapijiju, has denied accusations that the project cashed out over $436 million in stablecoins, stating that such claims are "complete misinformation." He clarified that the funds involved were part of their treasury management strategy, not a sign of selling.

Key Takeaways:

Sapijiju denies claims of a $436 million cash-out, labeling them as misinformation.
The USDC in question was allegedly part of Treasury management related to the PUMP token’s initial coin offering (ICO).
The crypto community has mixed reactions, with some expressing skepticism while others defend Pump.fun's actions.
Current data shows the Pump.fun wallet still holds significant assets despite concerns over fund movement.

Pump.fun Co-Founder Refutes $436 Million Cash-Out Allegations

Understanding the Allegations Against Pump.fun

Pseudonymous co-founder of Pump.fun, Sapijiju, has pushed back against claims that the project cashed out more than $436 million in stablecoins, describing these allegations as “complete misinformation” stemming from blockchain analytics firm Lookonchain.

In a post on X, Sapijiju addressed the rumors, asserting that the funds transferred were not sold but rather part of the company’s treasury management activities. He stated that the USDC involved originated from the initial coin offering (ICO) of the PUMP token and was simply redistributed among internal wallets to support the company’s financial strategy.

“What’s happening is part of Pump’s treasury management. The USDC from the $PUMP ICO has been shifted into different wallets to allow reinvestment into the company,” said Sapijiju. “Pump has never directly worked with Circle.”

What is Treasury Management?

Treasury management involves organizing and handling a project’s finances, including operating capital, proceeds from ICOs, or reserve funds to ensure ongoing operations. Such fund transfers might not imply selling; instead, they could reflect strategic wallet reorganizations and budget planning for future developments.

Cointelegraph attempted to contact both Lookonchain and Pump.fun for comments but had not received any responses by the time of publication.

Source: Sapijiju

Fund Movements Raise Concerns

Sapijiju’s remarks came after Lookonchain revealed that wallets connected to the Solana memecoin launchpad had transferred $436 million in USDC to the crypto exchange Kraken since mid-October, leading many to interpret it as a significant cash-out.

These fund transfers coincided with Pump’s monthly revenue dipping below $40 million for the first time since July, registering a decline to $27.3 million in November, according to DefiLlama data. Despite these movements, platforms like DefiLlama, Arkham, and Lookonchain reported that the Pump.fun wallet still retained over $855 million in stablecoins and $211 million in Solana tokens.

Nicolai Sondergaard, a research analyst at Nansen, indicated that the perceived sell-off could suggest further selling, while EmberCN noted that the funds originated from institutional private placements of the PUMP token rather than active dumping.

Source: Lookonchain

Community Reactions: A Mixed Bag

The reaction from the community to Sapijiju’s clarifications has been polarized. Some community members questioned the statement’s language, believing it raised more doubts, while others defended Pump.fun’s right to manage its treasury.

One user, Voss, pointed out apparent contradictions in the explanation, asserting that the co-founder contradicted himself by claiming a lack of involvement in the transfer while stating it was a treasury management action. “Definitely didn’t just contradict yourself on a post you had 10 hrs to respond to,” said Voss.

A member known as EthSheepwhale rejected Sapijiju’s statement outright, criticizing what they called “price manipulation via airdrops” and mismanagement that left the token trading below its original price.

According to CoinGecko, the PUMP token is currently trading at $0.002714, which is down 32% from its ICO price of $0.004, and has plummeted by nearly 70% from its September high of $0.0085.

Pump.fun Price Chart

Conversely, some community members expressed understanding, suggesting that the core issue ran deeper than wallet movements and pointed towards the need for greater transparency regarding reserves. User Matty.Sol stated that Pump.fun has the right to allocate its revenue and ICO returns as it sees fit. "Nothing wrong even if it’s true. It’s your own revenue tho,” Matty commented.

Another user, Oga NFT, suggested that moving USDC is a standard procedure for legitimate projects post-ICO, emphasizing that the pivotal question is whether the USDC reserves genuinely back the circulating supply.

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