Solana News Today: PUMP Plunges 20% as Legal Escalation and Airdrop Delay Spook Investors

Pump.fun’s native token PUMP has experienced a significant price decline, dropping over 20% within 24 hours as legal pressures and a delayed airdrop spooked investors. The token, which peaked at $0.0068 on July 16, fell to $0.0028 by July 24, marking a 52% plunge from its high and a 40% weekly drop [1]. This sell-off followed cofounder Alon Cohen’s July 23 announcement that the airdrop—a key incentive for early investors—would not occur in the “immediate future,” shifting the project’s focus to “execution and ecosystem growth” [1]. The delay destabilized market expectations, triggering liquidity risks and eroding confidence in the token’s long-term utility.

The airdrop delay coincided with a significant legal escalation. Law firms Burwick Law and Wolf Popper filed an amended complaint against Baton Corporation (Pump.fun’s operator) and added Solana Foundation, Solana Labs, and Jito Labs as defendants, alleging violations of U.S. RICO statutes, securities laws, and anti-money laundering regulations [1]. The lawsuit accuses the defendants of enabling a $5.5 billion “unlicensed casino” that allegedly “lacks proper user verification” and exposed investors to financial crime risks. Solana co-founders Anatoly Yakavenko and Raj Gokal, along with executives from the Solana Foundation and Jito Labs, are named for their alleged role in designing Pump.fun’s token and fee structures [1]. The complaint also claims that Solana and Jito failed to monitor suspicious activity on the platform despite their active involvement in its design [1].

Pump.fun’s collapse reflects broader concerns about the sustainability of meme coin projects. Launched this month with a presale price of $0.004, the platform faced criticism for its lack of tangible use cases and reliance on speculative hype. Cohen’s delay announcement signals a strategic shift but has deepened legal exposure, with regulators now scrutinizing decentralized platforms for compliance failures. The case could set precedents for liability in tokenized ecosystems, particularly those built on major blockchains like Solana [1].

Investor sentiment turned hostile as early adopters faced massive losses. PUMP’s price fell below its presale level for the first time since launch, and whale sell-offs intensified after Cohen’s interview with influencer Michael “ThreadGuy” Jerome [3]. Legal risks have also expanded beyond Pump.fun’s team, with Solana’s infrastructure partners now embroiled in the litigation. Regulators’ focus on compliance failures in decentralized finance may ripple across the crypto sector, influencing how platforms design incentives and manage legal risks [1].

The lawsuit and price crash highlight the fragile interplay between market hype and regulatory clarity. With U.S. authorities increasingly targeting projects for compliance gaps, Pump.fun’s legal entanglements could reshape investor behavior and platform design. As the litigation unfolds, its outcome will likely impact future approaches to airdrops, token utility, and the legal boundaries of decentralized initiatives [1].

Sources:

[1] [title1: "PUMP crashes 20% as Pump.fun founder says airdrop will ..."] [url1: https://crypto.news/pump-token-crashes-pump-fun-founder-airdrop-delay-2025/]

[2] [title2: "Pumpdotfun Litigation Update"] [url2: https://twitter.com/BurwickLaw/status/1234567890123456789]

[3] [title3: "The Alon Interview"] [url3: https://twitter.com/notthreadguy/status/9876543210987654321]