Pump.fun Founder Supports Regulations on Memecoin After Controversy Over 'Libragate'

The founder of Pump.fun, based in Solana and known as Alon, has called for enhanced regulations and protections for token projects following the LIBRA memecoin scandal. The incident, involving allegations of internal fraud and wiping out large market capitalizations, has raised concerns about the risks associated with memecoins and their trading platforms. Debate about 'Libragate' On February 15, LIBRA was launched and promoted by Argentine President Javier Milei as the official token of Argentina. However, shortly after Milei shared the token, some wallets quickly withdrew over 107 million dollars in liquidity, causing the market capitalization of this token to drop sharply by 4.4 billion dollars in just six hours. The sudden collapse and Milei's deletion of his confirmation tweet have raised suspicions of an orchestrated withdrawal, sparking criticism from the cryptocurrency community. Alon's reaction and the call for a protective fence To respond to the controversy, Alon went to X on February 18 to express his disappointment, declaring that he "disgusted" by the events surrounding the launch of LIBRA. He defends Pump.fun as a platform designed to protect users from controlled token launches, while emphasizing the urgent need for new protective measures. Alon has outlined some measures that can enhance the security and integrity of the token launch platforms. His proposals include: Educate users on how to safely and ethically create cryptocurrencies. Improve the guidance process to help newcomers trade more easily. Enhance security measures by reducing the likelihood of displaying transaction model tokens or suspicious ownership structures. He emphasized that these changes are necessary to ensure that users are protected while meeting the market's demand for memecoin. The participation and aftermath of Meteora The LIBRA disaster also led to significant internal turmoil in the cryptocurrency space. Ben Chow, co-founder of the decentralized finance project (DeFi) Meteora, resigned following allegations of poor management. Meow, co-founder of both Meteora and Jupiter, confirmed the resignation on February 18, citing Chow's "lack of judgment and caution" in key aspects of the project. Despite widespread speculation, Meow firmly denies that Meteora or Jupiter is related to insider trading or financial misconduct related to LIBRA. Chow also denies any wrongdoing, claiming that neither he nor the Meteora group has received or managed LIBRA tokens or has access to privileged information about the launch of this token. Investigations and next steps Before the dispute over LIBRA, Meow declared that Jupiter will engage the law firm Fenwick & West to conduct an independent investigation into this issue. The company, currently facing legal actions regarding the accused role in the financial scandal of FTX, is expected to provide transparency on the situation of LIBRA and restore trust in the cryptocurrency community. The 'Libragate' incident has highlighted the vulnerabilities in the memecoin market and the need for tighter security measures. Alon's call for improved regulations has sparked the ongoing debate on balancing innovation and security in the rapidly evolving cryptocurrency space. As investigations unfold, the industry will closely monitor whether stronger protective measures are implemented to prevent similar scandals in the future.