Pump.fun Reportedly Laid Off Over 40 Employees Before Token Vesting, Costing Staff Millions

Solana memecoin launchpad Pump.fun terminated more than 40 employees in two waves shortly before their $PUMP token allocations were scheduled to vest, according to a report by Sandmark. The layoffs stripped affected staff of their tokens, with at least one former employee losing a seven-figure payout. The allegations highlight the often-overlooked labor dimension of crypto startups, where compensation frequently leans heavily on token grants that vest only if employees remain with the company through a set date.

Sandmark said it obtained internal documents, emails, and audio and video recordings of meetings as part of its investigation.

Layoffs and Severance

The first wave of dismissals took place in late March and early April. According to the report, a "termination of services" email instructed employees to attend a meeting with Lloyd McCarthy, the firm's head of talent. Co-founder Noah Tweedale told employees that the cuts were necessary because the company "had grown too quickly," which he said had prevented Pump.fun from being "fast and rough."

Affected employees had their agreements terminated in early April and received one week of severance pay for each month of service.

Tweedale and his co-founder, Alon Cohen, did not respond to Sandmark's inquiries. Pump.fun has not issued any public response to the allegations.

Token Vesting and Lost Allocations

Pump.fun employees signed token grant agreements in mid-June 2025, with a quarter of their $PUMP allocations set to unlock in June 2026, according to the report. Those who departed the company before that vesting date forfeited their tokens. For at least one employee, the lost allocation was valued at over $1 million at current prices, Sandmark noted.

$PUMP has declined sharply from its 2025 peak. Sandmark, citing TradingView, placed the token approximately 79% below its peak of $0.0089. Crypto Times reported a slightly lower decline of 69% from the same peak. The token was down 26% year-over-year and traded at roughly $0.002 as the reports circulated, having risen nearly 8% on the day.

Reported Second Layoff Wave

Former employees indicated that a second round of layoffs may have occurred in mid-July. An X account using the name ExPumpEmployee began posting "termination of services" emails on Thursday, claiming to have been dismissed one day before $PUMP tokens would have vested.

Sandmark acknowledged that it could not independently verify the total headcount or every detail provided by former employees. KuCoin's news desk, which received the report for comment, similarly indicated that more than 40 employees were laid off across a two-month period.

Rapid Growth and Revenue

The scale of the layoffs stands out given Pump.fun's trajectory. According to Sandmark, the platform grew from approximately three employees to nearly 100 over the course of the year, after users created more than 20.8 million tokens on the platform. Citing analytics from Dune, the report stated that Pump.fun has generated roughly $1.3 billion in lifetime revenue and continues to take in about $1 million per day. Those figures place Pump.fun among the highest-grossing applications in the Solana ecosystem, where memecoin trading has been a primary driver of on-chain activity.

UK Incorporation and Regulatory Scrutiny

Pump.fun is incorporated in the UK under the name Baton Corporation Ltd. The platform has blocked UK users since December 2024, following a warning from the Financial Conduct Authority that it may be "carrying on activities which require authorization." It remains on the FCA's warning list.

The company's UK ties drew attention in 2024 when former employee Jarett Dunn transferred approximately $2 million from one of Pump.fun's wallets to thousands of addresses, claiming to have "killed" the memecoin. In December 2025, Wood Green Crown Court sentenced Dunn to six years in prison.

Sandmark also reported that Baton's accounts for the period through September 30, 2025, were due by June 30 and are now delinquent, carrying a potential fine of up to £375.

Pump.fun faces additional UK-based legal challenges, including a lawsuit alleging that it operated a "rigged" offering for investors and another concerning its maximal extractable value (MEV) practices. Separately, Cryptopolitan previously reported that Pump.fun launched a bounty feature after users began posting suicide offers on the platform.

Source: Cryptonews.net | Related: Cryptopolitan