Solana News Today: Federal lawsuit accuses Pump.fun, Solana partners of $5.5B meme coin fraud; tokens plunge 22% and 2.5%

A federal lawsuit filed by Burwick Law alleges that Pump.fun and its Solana blockchain ecosystem partners, including Solana Labs, the Solana Foundation, and Jito Labs, operated an unlicensed digital casino that defrauded investors of up to $5.5 billion through rigged meme coin trading mechanisms. The Southern District of New York complaint, filed on July 23, 2025, invokes the Racketeer Influenced and Corrupt Organizations (RICO) Act to target the platforms and their executives, including Solana founder Anatoly Yakavenko. The lawsuit describes Pump.fun as a "front-facing slot machine cabinet" in a broader scheme where users are lured by the illusion of decentralized trading but face systemic odds designed to favor the operators [1].

The plaintiffs argue that Pump.fun’s model enables unlicensed, zero-sum gambling by allowing anonymous token launches. On-chain transaction data cited in the complaint estimates user losses between $4 billion and $5.5 billion, attributed to a system where "the odds are overwhelmingly against the average participant." The platforms are accused of facilitating speculative trading in meme coins without regulatory safeguards, effectively creating a high-risk environment that exploits retail investors. The case names over a dozen defendants, including executives from Pump.fun, Solana, and Jito, alongside founders of the alleged "ecosystem" [1].

This litigation marks another legal challenge for Burwick Law, which previously targeted Solana-related projects in separate suits. Earlier in 2025, the firm filed cases involving the collapsed Peanut The Squirrel (PNUT) meme coin and the Hawk Tuah token, alleging fraudulent promotion by influencers and creators. The latest Pump.fun lawsuit, however, escalates the scrutiny on Solana’s broader infrastructure, with Yakavenko and other high-profile figures facing individual liability [1].

Market reactions to the filing have been swift. Pump.fun’s PUMP token dropped over 22% in 24 hours, while Solana’s native token fell nearly 2.5% as of 10:42 a.m. EST. The volatility underscores growing investor anxiety amid a wave of legal and regulatory pressures on decentralized finance (DeFi) platforms. Analysts note that the case could set a precedent for how courts define the boundaries of gambling versus speculative trading in crypto markets, though no forecasts are cited in the original filing [1].

The complaint does not specify whether the defendants have responded to the allegations or if regulatory bodies are investigating. However, it highlights the risks of unregulated innovation in the meme coin space, where rapid token creation and speculative trading often outpace oversight. The lawsuit’s outcome may influence future legal actions against similar platforms, particularly if courts recognize the RICO claims’ applicability to decentralized financial schemes.

Source: [1] [Pump.fun, Solana Partners Accused Of Operating Unlicensed Meme Coin Casino That Cost Investors $5.5 Billion] [https://coinmarketcap.com/community/articles/6882493e4ed1db4f630b9f55/]