Solana News Today: Solana Labs Jito Labs face RICO charges in 1.5B Pump.Fun fraud lawsuit

Solana Labs and Jito Labs have been added as co-defendants in a revised federal lawsuit accusing them of facilitating a $1.5 billion fraud tied to the Solana-based memecoin platform Pump.Fun. The amended complaint, filed on July 22 in the Southern District of New York by Burwick Law, expands a consolidated case originally targeting Pump.Fun and its affiliates. It alleges that Solana Labs and Jito Labs were not merely infrastructure providers but active participants in a “fraudulent online gambling and money transmission scheme” involving rapid-fire token launches and fee extraction from retail traders [1]. The lawsuit claims the operations lacked regulatory compliance, investor protections, or identity verification, enabling illicit activities such as money laundering.

A specific example cited in the filing involves the North Korea-linked Lazarus Group, which allegedly used Pump.Fun’s infrastructure to launch a memecoin called “QinShihuang” and channel funds from the Bybit exchange hack. The coin’s trading volume reportedly spiked to $26 million shortly after launch, allowing the group to convert proceeds into Solana’s native token, SOL. The complaint further asserts that Solana Labs and its Swiss-based foundation structured their operations to evade U.S. regulatory oversight while benefiting from U.S.-driven trading activity. Jito Labs is accused of providing validator and MEV (maximal extractable value) tools that enabled the platform to scale and profit from user transactions [1].

The lawsuit now charges all parties under the Racketeer Influenced and Corrupt Organizations (RICO) Act, alleging a coordinated enterprise designed to circumvent consumer protection laws and extract revenue through pseudonymous trading. Burwick Law argues that the defendants actively benefited from an ecosystem built on speculative hype and regulatory evasion. The filing also notes a decline in Pump.Fun’s usage metrics, including daily token launches and trading volume, with competitor Bonk Fun surpassing it in market share. Bonk Fun reportedly generated $165 million in daily volume compared to Pump.Fun’s $41 million [1].

The legal action underscores growing scrutiny of memecoin platforms and their infrastructure providers. While Pump.Fun faces specific claims about unregistered securities, all co-defendants are now accused of fraud, deceptive marketing, and unjust enrichment. The case highlights the challenges of regulating decentralized finance (DeFi) ecosystems, where technical complexity and jurisdictional gaps can obscure liability. Analysts have long warned about the risks of speculative token projects, though the RICO charges represent a novel approach in crypto litigation. The outcome could set a precedent for holding infrastructure providers accountable for facilitating unregulated financial activities [1].

Source: [1] [Solana Labs, Jito Labs hit with RICO charges in amended Pump Fun fraud lawsuit] [https://cryptoslate.com/solana-labs-jito-labs-hit-with-rico-charges-in-amended-pump-fun-fraud-lawsuit/]