Pump.fun reportedly dismissed employees shortly before their PUMP token allocations were due to vest, with at least one former worker allegedly losing tokens now worth more than $1m.
The company reduced its workforce in late March and early April after expanding its operations rapidly, according to an investigation by Sandmark.
Documents, emails and internal recordings reviewed by the publication indicate that some employees were dismissed just before their token grants were scheduled to begin vesting. At least one former employee is said to have forfeited an allocation that would now be valued in seven figures.
The workers had reportedly signed agreements covering their token grants in June 2025. Under the terms, 25% of each allocation was due to vest after one year, with further portions released over the following period.
Sandmark obtained a termination email showing that Pump.fun head of talent Lloyd McCarthy invited affected employees to a group meeting in late March. During the recorded call, co-founder Noah Tweedale said the company had “grew too quickly”, which had restricted its ability to work “fast and rough.”
The employees’ contracts were terminated in early April, the report said. They received severance payments calculated according to their length of service, but any PUMP tokens that had not vested were reportedly cancelled.
Pump.fun has not publicly responded to the findings.
Further allegations emerged after former employees claimed that Baton Corp., the company behind Pump.fun, carried out another round of redundancies in mid-July.
An X account created under the name “ex pump employee” alleged that about 40 employees were dismissed one day before their PUMP grants were due to vest. The account holder said they had worked for the company for more than a year.
The account also claimed that Pump.fun had never intended to launch a public PUMP airdrop because it opposed “giving free money” to users. Pump.fun has not publicly commented on that allegation either.
Sandmark said it had been unable to independently confirm the claim that 40 workers were dismissed immediately before the July vesting date. The allegation therefore remains based on the former employee’s account rather than employment records independently examined by the publication.
The dispute concerns employee compensation and does not relate to tokens already owned by public investors. However, it could prompt closer examination of how cryptocurrency companies design token incentives, including whether employment contracts permit firms to cancel substantial allocations shortly before they vest.
The allegations follow Pump.fun’s first major distribution of tokens to team members and investors after a one-year lock-up period ended.
On-chain tracking showed that 57.279 billion PUMP tokens, worth about $86.49m at the time, were transferred to 121 wallets on 15 July, according to crypto.news. Wu Blockchain described the movement as the beginning of a three-year vesting schedule for team and investor allocations.
The transfers made previously restricted tokens available to recipients, although the movement of tokens between wallets does not by itself show that any had been sold.
For US token holders, the employment claims do not alter their ownership rights. The wider market concern is that continued distributions to insiders could increase the amount of PUMP available for trading and create selling pressure if recipients transfer tokens to exchanges.
PUMP was trading at about $0.002 at press time, having risen by almost 5% over the previous 24 hours, according to CoinGecko. Despite that daily increase, the token remained about 77% below its all-time high from September 2025.
The fall in value comes while Pump.fun continues to produce large numbers of short-lived meme coins. A CoinGecko study published in June examined 18.67 million tokens created through the launchpad between January 2024 and June 2026.
Researchers found that 12.8 million of those tokens, equivalent to 68.67%, recorded their final Pump.fun bonding-curve trade on the day they launched. Tokens that never traded were left out because they had no measurable trading lifespan.
CoinGecko attributed the high failure rate to the platform’s low barrier to creating tokens. That makes it possible for users to abandon launches quickly when they do not attract early demand.
