Pump.fun Lawsuit Heats Up: Wild Allegations and a Token Tumble
Allegations of a Digital Casino in Disguise
A revised class-action lawsuit, recently lodged within the Southern District of New York, accuses the memecoin platform Pump.fun of operating as a “front-facing slot machine cabinet.” The suit claims the platform has siphoned off over $5.5 billion from users through misleading digital asset schemes.
Filed this past Wednesday, the lawsuit targets several key figures and entities, including Pump.fun’s pseudonymous developer, Bernie, its parent company Baton Corp., and infrastructure allies like Solana Labs, the Solana Foundation, Jito Labs, and the Jito Foundation. The case paints an image of a coordinated operation likened to an “unlicensed casino,” driven by volatility and hype as a substitute of transparency and investor protection.
The criticism vividly describes the platform’s structure as akin to a rigged slot machine. Early participants seemingly profit by offloading their tokens onto later investors. According to the filing, there’s no substantial project, product, or revenue—only a rapid cycle of shopping for, dumping, and eventual collapse.
Expanded Allegations within the Amended Complaint
The latest criticism broadens the scope of alleged wrongdoing, introducing claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), fraud, aiding and abetting, civil conspiracy, and unjust enrichment. Plaintiffs are pushing for the rescission of all Pump.fun transactions and are searching for compensation for the damages they claim were inflicted by this “rigged” system.
The lawsuit also highlights the involvement of Solana-affiliated groups in facilitating the alleged scheme. Solana Labs and the Solana Foundation are accused of providing the platform—the Solana blockchain itself—and capitalizing on each transaction through block space sales, validator fees, and the appreciation of the SOL token.
Additionally, the filing sheds light on the liquidity infrastructure provided by Jito Labs and the Jito Foundation, which purportedly profited from maximum extractable value strategies linked to memecoin trading on Pump.fun.
Originally filed back in January, the lawsuit initially claimed that Pump.fun employed aggressive marketing tactics to create artificial demand for “highly volatile” tokens, pocketing nearly $500 million in fees consequently.
Cointelegraph attempted to succeed in out to Alon Cohen on X for a press release but had not received a response by the point of publication.
PUMP Token Faces Turbulence as Investors Sell Off
On Tuesday, two significant early investors in Pump.fun’s PUMP token unloaded over $160 million value of tokens onto exchanges. This move sparked concerns a couple of potential larger sell-off. Wallets often known as “PUMP Top Fund 1” and “Top Fund 2” initially acquired $150 million value of tokens during a personal sale but have since offloaded nearly all their holdings, with just $29.5 million left in a single wallet.
According to BitMEX, around 60% of participants within the PUMP presale have already sold or transferred their tokens. Analysts suggest that the big initial unlock of tokens likely contributed to the downward pressure on prices, despite the token’s strong early performance. Pump.fun managed to lift nearly $500 million in its ICO, selling out in a mere 12 minutes.
