Memecoin platform Pump.fun is facing a sweeping $5.5 billion class-action lawsuit, with allegations that it operates like an unlicensed digital casino built on the Solana blockchain.
Lawsuit Claims a “Rigged Slot Machine” Structure
Filed in the Southern District of New York, the amended complaint accuses Pump.fun of deceiving users through volatile memecoin launches designed to enrich early insiders. The platform’s system is described as a “front-facing slot machine cabinet” that encouraged users to speculate on worthless tokens with no real backing.
“There is no underlying project, product, or revenue — only a fast-moving cycle of buying, dumping, and collapse,” the lawsuit states.
The filing alleges that Pump.fun used guerrilla marketing to build hype and create artificial urgency, while early participants routinely dumped tokens on newer users — a pattern resembling a classic pump-and-dump.
Solana Ecosystem Named in RICO Allegations
In a major escalation, the lawsuit now includes RICO charges, as well as fraud, civil conspiracy, and unjust enrichment. Defendants named include:
- Pump.fun developer “Bernie”
- Parent company Baton Corp.
- Solana Labs and Solana Foundation
- Jito Labs and the Jito Foundation
The complaint claims that Solana-affiliated entities monetized user wagers by selling block space, collecting validator fees, and benefiting from SOL price appreciation. Jito Labs is also accused of profiting via MEV (Maximum Extractable Value) strategies connected to memecoin trades.\
Mass Sell-Off of PUMP Token Sparks Alarm
The legal action follows a turbulent week for PUMP, the platform’s native token. According to on-chain data:
- Two early wallets sold over $160 million worth of tokens to exchanges.
- One wallet, “Top Fund 1,” now holds less than $30 million, down from $150M.
- 60% of presale participants have sold or moved their tokens, per BitMEX.
Despite Pump.fun’s $500 million ICO selling out in 12 minutes, the large unlock and aggressive early exits triggered sharp price declines, further fueling concerns around the platform’s long-term viability.
Outlook Uncertain Amid Legal Scrutiny
With regulators intensifying oversight of high-risk crypto platforms, Pump.fun’s legal troubles may signal a broader crackdown on decentralized gambling mechanisms disguised as innovation. The case could also test how far blockchain infrastructure providers — like Solana Labs — can be held accountable for third-party activity.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.