Pump.fun unlocked $102 million for its team after firing employees

Pump.fun laid off more than 40 people in two rounds before the employee tokens were vested. Some of the laid off lost seven-figure value of tokens.

A few weeks after the employee vesting period, the team and early investors unlocked 82.5 billion PUMP tokens for themselves. When the layoffs and $370 million in token destruction occurred, the platform's monthly revenue still exceeded $19 million.

Pump.fun, the Solana launch platform that allows anyone to create memin seconds, is accused of firing employees to keep the tokens. An anonymous account on the X platform, which claimed to represent more than 40 former employees, released internal dismissal emails one after another this week, claiming that the timing of the two rounds of layoffs was just before employees were about to receive the first batch of PUMPs. The allegations were revealed by the Sandmark investigation, just weeks after the company's founders and early supporters unlocked billions of proprietary tokens.

The June contract and the end of March meeting

The grant agreement at the core of the controversy was signed in mid-June 2025. According to the terms of the Sandmark review, the first 25% of employee PUMP tokens will be vested after one year of service, and the rest will be gradually distributed later. This milestone falls in June 2026. Most affected employees never met this condition.

At the end of March, talent director Lloyd McCarthy convened a meeting with employees. Co-founder Noah Tweedale said at the conference that the company was expanding too fast and could no longer operate "quickly and crudely"-a sentence that later became synonymous with the entire incident. The contract was terminated in early April, leaving only two months before the vesting period. Employees receive one week of severance pay for each month they work, and unassigned tokens are directly cancelled.

The company's own explanation is more common. Pump.fun recruited quickly during the meincoin boom from 2024 to early 2025. When transaction volume cooled, it reduced its staff and paid severance pay based on a fixed formula of one week per month. In this way, layoffs are a lagging correction for over-recruitment, and the vesting date is only an incidental result. However, this explanation did not explain why unvested tokens were directly cancelled rather than paid or reincorporated into the employee pool.

Former employees said the second round of layoffs occurred in mid-July, bringing the total number to more than 40, but Sandmark was unable to independently confirm the number of layoffs in July, which was based only on former employees 'claims. At that time, the company had cut its team that had previously expanded to about 100 people.

Layoffs timeline

June 2025: Employees sign a PUMP grant agreement, with the first batch of 25% having a one-year vesting period.

First round of layoffs-early April 2026: The contract was terminated a few weeks before the vesting period in June, and unvested tokens were cancelled.

Token Destruction-April 28, 2026: Pump.fun destroyed approximately US$370 million of repurchase PUMPs, accounting for approximately 36% of the circulating supply.

Attribution period-June 2026: 25% of employees 'vesting period has passed, but the affected employees have long since left.

Internal Unlock-July 12, 2026: The team and existing investors unlocked 82.5 billion PUMPs, worth approximately US$102 million.

Second round of layoffs-mid-July 2026: Second round of layoffs reported by former employees brought the total number to more than 40.

Whistleblower-End of July 2026: An anonymous account began posting internal dismissal emails on X.

82.5 billion tokens that insiders didn't lose

When employees lose grants, executives are about to reap. On July 12, exactly one year after PUMP's initial token issuance, the one-year lock-up period expired and 82.5 billion tokens were transferred to insider wallets. Among them, 50 billion belong to the core team and 32.5 billion belong to existing investors, with a value of approximately US$102 million based on end-July prices. Wallet changes alone cannot show whether any tokens have been sold.

This number is not arbitrary. The Pump.fun team holds 20% of the 1 trillion PUMP supply, with early investors holding another 13%. 25% of the total of 330 billion is exactly 82.5 billion. Insiders received the same 25% one-year vesting at almost the same point in time as fired employees, but the latter was stripped. Wu Blockchain pointed out that this allocation opens a three-year ownership window for these shares, so the team and investors 'tokens will continue to be unlocked until 2029.

Initial token offering: 33%·330 billion Pumps; Community and Ecology: 24%·240 billion Pumps; Team (unlocked on July 12, 2026): 20%·200 billion Pumps; Existing investors (unlocked on July 12, 2026): 13%·130 billion Pumps; Live broadcast: 3%·30 billion Pumps; Liquidity and exchanges: 2.6%·26 billion Pumps. Together, the team and existing investors (marked in amber) hold 33% of the 1 trillion PUMP supply. The 82.5 billion tokens unlocked on July 12, 2026 are the first 25% of this share. Data source: Tokenomist.

Why firing employees can quietly save token companies millions

Token compensation is a cryptocurrency version of stock options. Early employees receive below-market salaries in exchange for a share of tokens that may increase in value, while the vesting period is designed to reward those who stay. There is one important difference between the mechanism and equity: when a startup cancels unvested shares of employees, the founder will not benefit from it; when the contemporary coin project cancels unvested grants, the coins will only remain in the treasury and exit circulation, thereby supporting the price of the remaining holders. The principle of freedom to hire does the rest: a company that can fire employees without reason can actually decide who can reach the vesting period and who cannot. For volatile tokens, the moment of dismissal can be worth millions, and these tokens never need to be delivered. Ordinary equity ownership rarely creates such pressures because equity dilution is slow and predictable. Liquidity tokens, which can be cancelled at any time several weeks before vesting, make each vesting period a decision-making point where the person signing the termination letter receives a direct financial return.

US$370 million in tokens were destroyed in the month layoffs began

April was a busy month for Pump.fun. In the same week as the termination contract, the company announced on April 28 that it had destroyed all PUMP tokens it had bought back in the past nine months, worth approximately $370 million, or approximately 36% of the circulating supply. This is one of the largest supply cuts by token share in cryptocurrency history. The company also cut its repurchase program from 100% of revenue to 50%, with the rest used for operations.

All this does not come from companies in financial trouble. In the 30 days ended July 22, Pump.fun's revenue was US$19.1 million; earlier in 2026, its cumulative revenue exceeded US$1 billion, becoming the first Solana platform to reach this milestone. The PUMP token price was barely affected after reports of layoffs, rising about 6% in the 24 hours after the news was announced, a sign that the cryptocurrency market often views aggressive cost cuts as a good for holders.

Impact on Crypto Compensation and Baton Corp

For U.S. token holders, these employment allegations will not change their ownership. The more immediate risk lies in supply. The July unlock kicked off a multi-year release of team and investor tokens, and any large-scale shift to exchanges could increase selling pressure, which has dropped 75% from its 2025 high.

Public records that can determine the number of employees have not been submitted. Baton's UK accounts as of September 30, 2025 (the number of employees should be disclosed) were originally scheduled to be submitted to the Companies Registry before the end of June, but have not yet been submitted, so the number of more than 40 employees still relies on the whistleblower's account.

Reputational and legal risks lie with the entities behind the platform. Pump.fun is operated in the UK as Baton Corporation Ltd., and the UK's Financial Conduct Authority warned in December 2024 that the company might provide financial services without permission, prompting the platform to block British users. Allegations that layoffs were timed to deprive employees of pay may draw new attention from labor regulators in several countries.

This is not the first time the company has been in internal turmoil. In May 2024, former developer Jarrett Dunn used a lightning loan to steal approximately $2 million from the platform after a public fallout with the team. The whistleblower's actions were a quieter form of resistance, carried out through leaked emails, and also a sign of an organized revolt by crypto employees for their handling of pay-a problem the industry has so far largely avoided. Co-founders Tweedale and Cohen were also included in a securities class action lawsuit filed by the Southern District of New York in January 2025.

Whether compensation models will change may ultimately depend on economic factors. DefiLlama data shows that Pump.fun's annualized revenue in 2026 is close to US$327 million, much lower than US$971 million in 2025, which makes 50% of the repurchase plan based on a shrinking base, indicating that future destruction will be smaller than that in April. The three-year insider vesting period will keep new team and investor tokens on the market until 2029, and Pump.fun has not publicly responded to these allegations. As anonymous accounts continue to post dismissal emails, the next round of disclosures is likely to come from former employees rather than the company itself.