Solana News Today: PUMP token plunges 45% as $4–5.5B RICO lawsuit and airdrop delay trigger sell-off

Pump.fun, the meme-token platform known for its rapid-fire creation of speculative assets, is embroiled in a $4–5.5 billion class-action lawsuit under the RICO Act, while its native token PUMP has plummeted 45% from its peak following a delayed airdrop announcement. The legal action, filed by Burwick Law, accuses Pump.fun of running an unregistered securities exchange and exploiting users through “slot machine”-like mechanics that prioritize retail investors. The lawsuit expands to include Solana Labs, the Solana Foundation, Jito Labs, and the Jito Foundation, alleging collusion in manipulative practices such as algorithmic frontrunning and MEV (Maximal Extractable Value) tools [1].

The airdrop delay, confirmed by co-founder Alon Cohen in July 2025, triggered immediate market panic. PUMP’s price dropped 18.7% within hours, with a 42.4% weekly decline as of July 22, according to CoinGecko. The token, which peaked at $0.0068, now trades below its initial offering price of $0.004, erasing gains from a presale that sold 500 million tokens in 12 minutes [2]. Critics argue the platform’s bonding-curve model, which rewards early buyers and algorithmic participants, fosters addictive, gambling-like behavior with limited utility [3].

The lawsuit details how Pump.fun’s operations allegedly exploit users through opaque mechanisms, including unregistered securities and bot-driven manipulation. Plaintiffs claim the platform’s “slot machine” analogy is justified by its high-risk, low-reward structure, which disproportionately harms inexperienced traders. Solana and Jito are accused of enabling these practices by monetizing user activity through block fees and MEV tools, challenging their claims of neutrality [4].

Market reactions have been volatile. High-profile investors, such as Jeffrey Huang (Machi Big Brother), have held long positions despite losses exceeding $5.8 million, while others offloaded billions in tokens. Wallets linked to private sale investors sold 1.2 billion PUMP tokens, incurring $1 million in losses, as scrutiny intensified over fee-extraction mechanisms that generated $741 million in SOL fees [5]. The July 2025 $600 million token sale—valuing the project at $6.13 billion—highlighted structural flaws, including a 40% team/investor allocation with no vesting, contributing to an 18% post-launch price drop.

Regulatory scrutiny has deepened. A January 2025 lawsuit already alleged unregistered securities practices, while UK users were banned in December 2024 amid concerns over harmful content. Pump.fun faced temporary suspensions in November 2024 for live-streaming explicit promotions, with restrictions re-enabled in April 2025 for 5% of users. These incidents underscore governance challenges and moderation failures [6].

Analysts note that Pump.fun’s crisis reflects broader risks in meme-coin ecosystems prioritizing virality over sustainability. Cohen’s pivot to long-term development may offer a strategic shift, but PUMP’s trajectory remains tied to legal outcomes and regulatory clarity. Competitor LetsBonk has capitalized on the chaos, launching a strategic buyback program to attract disillusioned users. The platform, which generated $1.4 million in fees in 24 hours, is betting on ecosystem growth through high-performing tokens like Useless Coin and ANI [7].

Source: [1] [PUMP Token Plunges 25% as Legal Pressure and Airdrop Delays Spark Sell-Off](https://www.ainvest.com/news/ethereum-news-today-pump-token-plunges-25-legal-pressure-airdrop-delays-spark-sell-2507/)

[2] [Pump.fun Faces $5.5B Class Action Alleging Unlicensed Casino Operations](https://cryptonews.com/news/pump-fun-accused-of-running-unlicensed-casino-in-5-5b-class-action-lawsuit/)

[3] [PUMP Crashes 20% as Pump.fun Founder Delays Airdrop and Lawsuit Widens](https://crypto.news/pump-token-crashes-pump-fun-founder-airdrop-delay-2025/)

[4] [Pump.fun Faces Class Action Lawsuit as Token Crashes 45% After Airdrop Delay](https://coinmarketcap.com/community/articles/688303d17d1070328ddde573/)

[5] [PUMP Token Declines After Airdrop Delayed](https://web.ourcryptotalk.com/news/pump-token-declines-after-airdrop-delayed)

[6] [Pump.fun Faces $5.5B Class Action Alleging Unlicensed Casino Operations](https://cryptonews.com/news/pump-fun-accused-of-running-unlicensed-casino-in-5-5b-class-action-lawsuit/)

[7] [Pump.fun Faces Class Action Lawsuit as Token Crashes 45% After Airdrop Delay](https://coinmarketcap.com/community/articles/688303d17d1070328ddde573/)