Chainalysis has expanded its coverage to include meme coins launched on the Solana-based platform Pump.fun.
Chainalysis has expanded its coverage to include meme coins launched on the Solana-based platform Pump.fun. The blockchain analytics firm announced on Dec. 12, 2024, that its Know Your Transaction (KYT) and Reactor tools will now cover all Solana tokens, including those created on Pump.fun. This means exchanges can list these tokens with full compliance, and governments can monitor them for potential scams or fraud.
Pump.fun has gained popularity this year as an easy platform for creating meme coins. By early December, over 4 million meme coins had been launched on the platform, generating over $93 million in revenue in November. However, the rapid growth of Pump.fun has raised concerns, especially about its reliability. A crypto researcher reported that nearly 95% of meme coins launched on Pump.fun end up being "rug pulled" within a day, leaving investors with losses.
Chainalysis’ new coverage aims to address these concerns. With its expanded tracking system, regulators and exchanges can more easily detect fraudulent activities involving these tokens. Matthew Wilson, Chainalysis’ director of product, emphasized that from the moment a Solana Program Library (SPL) contract is deployed, the platform offers complete tracking, alerting, and exposure. This expansion is expected to bring more security to the meme coin market and increase trust among exchanges and governments.
Despite the expanded coverage, Pump.fun faces challenges in some regions. The United Kingdom’s Financial Conduct Authority (FCA) issued a warning on Dec. 3, 2024, restricting access to the platform. The FCA stated that Pump.fun was not authorized to operate in the UK and warned users about potential scams. Though UK users can no longer access Pump.fun, they are given a link to withdraw their funds. The FCA’s move highlights concerns about the potential risks of using unauthorized platforms in the crypto space.
Chainalysis’ expansion into meme coin tracking follows a growing trend of regulatory scrutiny in the cryptocurrency industry. Many in the crypto world have praised the firm’s move, including Schwartz Associates director Christopher Roberts, who noted that it was one of the many reasons they were pleased to work with Chainalysis. However, some crypto community members have made light of the development, with compliance consultant Stephen Sergent joking about the idea of losing money on meme coins “compliantly.”
Despite Pump.fun’s challenges, Chainalysis’ decision to extend its coverage to include these tokens aims to provide more oversight and transparency in the meme coin market. With growing concerns over fraud, this move is seen as a step toward safer trading for both investors and regulators.
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