Solana News Today: Pump.fun Lawsuit Claims $3.18B Racketeering Scheme PUMP Dips 20%

A new federal lawsuit has intensified the legal scrutiny of Pump.fun, a Solana-based platform at the center of a controversial meme coin boom. The amended class-action complaint, filed in the Southern District of New York, accuses Pump.fun, its founders, and affiliated entities—including Solana Labs and Jito Labs—of orchestrating a “racketeering scheme” through rigged token launches and insider trading. The lawsuit alleges that over 98% of tokens created on the platform collapsed within 24 hours, with plaintiffs claiming these tokens were designed as “digital scratch tickets” to siphon transaction fees rather than deliver long-term value [1].

The filing, spearheaded by Burwick Law, expands on earlier lawsuits that criticized Pump.fun’s reliance on viral marketing and influencer partnerships to fuel speculative frenzy. The latest complaint adds allegations of RICO violations, wire fraud, and gambling-related misconduct, suggesting the platform’s mechanics mimicked “rigged slot machines” where early participants profited while retail users bore losses. Plaintiffs argue that Jito Labs and Solana entities colluded to exploit Pump.fun’s automated bonding curves and bot-driven trading, generating over $3.18 billion in combined revenue from January 2024 to mid-2025 [1].

The lawsuit highlights the platform’s scale: 11 million tokens were launched during the alleged scheme, with Pump.fun alone earning $722 million in fees. Critics note that the model relies on rapid price spikes followed by collapses, a structure reminiscent of traditional pump-and-dump schemes. The filing describes how “early access was reserved for bots and insiders,” creating an uneven playing field for users [1].

Adding to the legal pressures, Pump.fun’s founder recently delayed a promised airdrop of native tokens, sparking a 20% drop in the PUMP token’s value. Analysts interpret this as a sign of operational instability, with some suggesting the company lacks sustainable growth strategies. “This isn’t just a PR issue; it’s a liquidity crisis in the making,” one market commentator stated, emphasizing the platform’s dependence on speculative trading over organic adoption [2].

The case reflects broader regulatory concerns about meme coin platforms, which often prioritize virality over transparency. Regulators globally are increasingly scrutinizing projects that blur the lines between innovation and exploitation. The lawsuit’s focus on securities law violations could force Pump.fun to defend its operations in court—a development that risks further damaging its already strained reputation.

Legal experts suggest the case could set a precedent for liability in decentralized finance (DeFi), where anonymity and complex structures often obscure accountability. If courts rule against Pump.fun, it may trigger a wave of investor lawsuits and prompt regulators to establish clearer guidelines for meme coin projects. For now, the platform continues to generate significant revenue, with Dune Analytics data showing over $630 million in total earnings as of July 24 [1].

The unfolding drama underscores the volatility of the crypto market, where speculative projects thrive on hype but falter under scrutiny. Pump.fun’s legal troubles highlight the risks of models that prioritize short-term gains over user protection, serving as a cautionary tale for the broader industry. As the case progresses, its outcome could reshape how platforms operate in the DeFi space, emphasizing the need for transparency and adherence to evolving regulatory standards.

Sources:

[1] [Is Pump.fun in hot water? Legal woes deepen as third lawsuit alleges fraud] [https://coinmarketcap.com/community/articles/6882148140f84e3b61d5ca4c/]

[2] [PUMP crashes 20% as Pump.fun founder says airdrop not coming soon, legal pressure mounts] [https://crypto.news/...]