Pump.fun Founder Urges Memecoin Guardrails in the Wake of ‘Libragate’ Scandal

The memecoin market is once again under scrutiny following the collapse of the LIBRA token, an incident now widely referred to as ‘Libragate.’ The event, which resulted in a $4.4 billion market cap loss within just six hours, has led to industry leaders calling for increased safeguards to prevent similar scams in the future. Among them is Alon, founder of Pump.fun, who has called for the introduction of stricter security measures and user protection mechanisms in memecoin trading.

The LIBRA Token Collapse and Its Fallout

The LIBRA token was launched on February 15, 2025, and was briefly promoted by Argentine President Javier Milei as an official digital asset of Argentina. However, shortly after its debut, several wallets were found to have siphoned off over $107 million from the token’s liquidity pool. This resulted in a massive crash, causing the price of LIBRA to plummet to near zero, effectively wiping out billions in investor funds. President Milei deleted his endorsement shortly after, further fueling speculation about insider manipulation.

The controversy surrounding LIBRA has not only sparked investor outrage but has also led to internal turmoil within the crypto space. Ben Chow, co-founder of Meteora, has resigned from his position, citing “lack of judgment and care” in overseeing aspects of the project. This resignation underscores the need for more rigorous oversight and due diligence in memecoin development.

Pump.fun’s Call for Stronger Safeguards

In response to the scandal, Alon, founder of Pump.fun, has advocated for introducing guardrails to prevent insider-controlled token launches. Pump.fun, a popular on-chain memecoin launch platform, aims to provide a secure environment for retail traders and new token creators while maintaining the core ethos of decentralization and permissionless innovation.

Alon’s primary concerns revolve around:

• Increased user education: Teaching users how to identify red flags in token launches.
• Enhanced onboarding processes: Ensuring that new traders are well-informed before investing.
• Suspicious activity filtering: Reducing visibility of tokens with questionable trading patterns or high centralization risks.
• Greater transparency in token launches: Providing users with real-time data on token ownership structures.

Alon stated that while some have called for an outright ban on memecoins, he believes that “user demand for permissionless on-chain creation and speculation will persist.” Thus, instead of banning memecoins outright, he urges platforms to implement stronger security measures to protect traders.

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The Growing Demand for Memecoin Regulations

The memecoin space has exploded in recent years, with billions of dollars flowing into speculative tokens. However, the lack of regulation and oversight has made it a hotbed for scams, pump-and-dump schemes, and insider trading.

Incidents like Libragate serve as a wake-up call for both investors and regulators. Market experts argue that the introduction of smart contract audit requirements, transparency reports, and whale monitoring systems could help mitigate risks and prevent future rug pulls.

In an era where crypto security is becoming a major concern, platforms like Pump.fun are setting an example by pushing for responsible trading practices without stifling innovation.

Conclusion: The Future of Memecoin Markets

The LIBRA token collapse has undoubtedly shaken confidence in the memecoin sector, highlighting the urgent need for stricter safeguards. Alon’s call for increased user protection and trading transparency is a step in the right direction, but whether or not the broader crypto community will embrace these changes remains to be seen.

As crypto markets evolve, the balance between permissionless innovation and investor protection will continue to be a crucial debate. What is clear, however, is that without better oversight, incidents like Libragate could become more frequent, further tarnishing the reputation of the memecoin ecosystem.