Solana News Today: Pump.fun faces $5.5B class action lawsuit over unlicensed "Meme Coin Casino" claims

Pump.fun, a Solana-based memecoin platform, is embroiled in a $5.5 billion class action lawsuit alleging it operates an unlicensed “Meme Coin Casino” that has generated over $722 million in revenue while inflicting estimated losses on retail traders. Filed in the U.S. District Court for the Southern District of New York, the consolidated lawsuit names Baton Corporation—the platform’s operator—as well as founders Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, alongside executives from Solana Labs, the Solana Foundation, and Jito Labs. The plaintiffs claim the defendants orchestrated a coordinated racketeering scheme under the Racketeer Influenced and Corrupt Organizations Act (RICO), likening Pump.fun to a “slot machine cabinet” where users deposit SOL tokens for speculative outcomes.

The lawsuit alleges systemic regulatory violations, including failure to enforce age verification or KYC protocols, enabling minors to engage in high-risk trading. Jito Labs is accused of manipulating transactions through Maximal Extractable Value (MEV) bundling, while Solana Labs and the Solana Foundation are alleged to profit from validator fees and block space sales. Court documents reveal Pump.fun earned over $400 million in fees in 2024 alone, with Jito Labs capturing $633 million in user-paid tips. The platform’s business model, which includes a 1% transaction fee and a 0.05% revenue-sharing structure for token creators, has drawn scrutiny for its lack of transparency.

The complaint 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. The platform processes over $66 billion in cumulative trading volume daily and launches approximately 27,305 new tokens per day, raising concerns about its role in facilitating intellectual property theft. Tokens mimicking brands like Apple, Tesla, and Meta, as well as unauthorized celebrity names, are cited as examples of fraudulent activity.

Additional allegations include enabling cryptocurrency laundering by the sanctioned Lazarus Group, which reportedly moved $1.08 million in stolen funds through Pump.fun. The platform’s native PUMP token, launched in July 2025, crashed 30% within 24 hours and has lost nearly 50% of its value since its debut. Founder Alon Cohen’s recent admission that no airdrop is imminent led to a 14% drop in the token’s 24-hour price. X suspended Pump.fun’s official account and Cohen’s personal account in June 2025, heightening speculation about potential SEC investigations.

Plaintiffs seek class certification, compensatory and treble damages under RICO, a federal equity receiver, and permanent injunctions to prevent operations without proper licensing. The case underscores broader regulatory challenges in the crypto sector, particularly around memecoins and decentralized platforms. With 99.6% of Pump.fun’s 13.55 million trader addresses failing to profit above $10,000, the lawsuit adds pressure on industry participants to address risks associated with speculative trading and unregistered securities.

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)