Financial Watchdog Issues Warning
The UK’s Financial Conduct Authority has banned the memecoin generator platform Pump.fun, warning that it operates without proper authorization. The decision was announced on Dec. 3, with the FCA urging consumers to avoid dealing with the platform.
“You should avoid dealing with this firm and beware of scams”, the FCA stated in its warning.
According to the regulator, Pump.fun might be offering or promoting financial services and products in the UK without the necessary permissions. The move by the FCA is part of the watchdog’s continued efforts to protect consumers from unauthorized and possibly fraudulent entities in the crypto space.
Consumer Protections at Risk
The FCA highlighted that UK consumers using Pump.fun would not have access to the Financial Ombudsman Service, a body that resolves complaints between consumers and financial firms, or the Financial Services Compensation Scheme, which covers deposits in case a firm fails.
Already, terms of service for Pump.fun include prohibiting users from several U.S.-sanctioned or high-risk countries: Cuba, Iran, North Korea. The UK was not previously listed among these restricted areas.
Pump.fun’s meteoric rise to
Launched in January 2024, Pump.fun is a Solana blockchain-based platform that enables users to build and launch tokens, more so memecoins, without requiring any technical knowledge. The ease of use and the low-cost process of creating tokens have contributed to its popularity. According to Dune Analytics, the platform has generated over $288.4 million in revenue since its launch.
User Reactions and Workarounds
This is the FCA ban, and already, UK-based users of the platform are unable to access it, as evidenced by many online reports. However, a section of users has since leveraged workarounds, like virtual private networks (VPNs), to evade these restrictions. Telegram conversations with Pump.fun users highlighted mixed feelings of frustration and resolve. Some even shared methods through which they circumvent the ban.
FCA’s Larger Crypto Regulation Push
The action against Pump.fun is part of the broader strategy of the FCA towards the crypto industry. In October 2023, the watchdog added more than 140 crypto firms to its list of unauthorized entities, including Huobi and KuCoin.
As the UK continues to create its regulatory framework for digital assets, the FCA plays an important role in its assurance of compliance. It has been expected that upcoming regulation will cover stablecoins, staking, and other activities involving crypto, building much-needed clarity and consumer protection for this fast-evolving industry.
