Solana News Today: Pump.fun Faces $5.5 Billion Lawsuit Over Meme Coin Casino Allegations

Pump.fun, a Solana-based memecoin platform, is embroiled in a $5.5 billion class-action lawsuit filed in the U.S. Southern District of New York, alleging it operates an unlicensed “Meme Coin Casino” designed to defraud users. The consolidated complaint accuses Baton Corporation—Pump.fun’s operator—and its founders of orchestrating a racketeering scheme under the Racketeer Influenced and Corrupt Organizations Act (RICO) by exploiting Solana’s blockchain infrastructure. The lawsuit further implicates executives from Solana Labs, the Solana Foundation, and Jito Labs, alleging coordinated efforts to generate over $722 million in revenue through opaque practices while inflicting significant losses on retail traders [3].

The platform’s business model, which charges a 1% transaction fee and a 0.05% revenue-sharing structure for token creators, has drawn scrutiny for its lack of transparency. Plaintiffs argue that Pump.fun functions as a “slot machine cabinet,” where users deposit SOL tokens for speculative outcomes, effectively mimicking gambling. The lawsuit highlights 20 specific “Pump Tokens” as unregistered securities, including StakeCoin, QuStream, and DeepCore AI, which allegedly promised “real-world utility” without SEC registration. Lead plaintiff Michael Okafor reported losing $242,076 when purchased tokens collapsed in value, a claim reflective of the broader user experience: 99.6% of Pump.fun’s 13.55 million trader addresses failed to profit above $10,000 [3].

The legal action extends beyond Pump.fun, accusing Solana Labs and the Solana Foundation of profiting from validator fees and block space sales while enabling the platform’s operations. Jito Labs is alleged to have manipulated transactions via Maximal Extractable Value (MEV) bundling, extracting $633 million in user-paid tips in 2024 alone [3]. Additionally, the platform is accused of facilitating cryptocurrency laundering by the sanctioned Lazarus Group, which reportedly moved $1.08 million in stolen funds through Pump.fun [3]. The platform’s native PUMP token, launched in July 2025, has experienced sharp declines, crashing 30% within 24 hours and nearly 50% since its debut. Founder Alon Cohen’s admission that no airdrop is imminent led to a 14% drop in the token’s 24-hour price, exacerbating user losses [3].

Plaintiffs seek class certification, compensatory and treble damages under RICO, a federal equity receiver, and permanent injunctions to halt operations without proper licensing [3]. The case underscores regulatory challenges in the crypto sector, particularly around memecoins and decentralized platforms. Pump.fun processes over $66 billion in cumulative trading volume daily and launches approximately 27,305 new tokens per day, raising concerns about intellectual property theft, as tokens mimic brands like Apple, Tesla, and Meta [3]. The lawsuit also criticizes the platform’s failure to enforce age verification or KYC protocols, enabling minors to engage in high-risk trading [3].

The legal battle has already had ripple effects. X suspended Pump.fun’s official account and Alon Cohen’s personal account in June 2025, fueling speculation about potential SEC investigations [3]. With Solana’s ecosystem facing scrutiny, the case could reshape how decentralized platforms operate, particularly those relying on speculative trading models. Analysts note that the outcome may influence broader regulatory approaches to memecoins, which have surged in popularity but remain largely unregulated [1].

Source: [1] [title1] [url1](https://cryptonews.com/news/pump-fun-accused-of-running-unlicensed-casino-in-5-5b-class-action-lawsuit/) [2] [title2] [url2](https://twitter.com/lookonchain/status/1234567890) [3] [title3] [url3](https://cryptonews.com/news/pump-fun-accused-of-running-unlicensed-casino-in-5-5b-class-action-lawsuit/) [4] [title4] [url4](https://twitter.com/cryptonews/status/0987654321)