Pump.fun, a Solana-based memecoin platform, is currently embroiled in a massive class action lawsuit alleging that it operates an illegal “Meme Coin Casino.” The lawsuit, filed in the United States District Court for the Southern District of New York, targets the operator of Pump.fun, Baton Corporation, as well as its founders and executives from Solana Labs, the Solana Foundation, and Jito Labs.
The plaintiffs in the lawsuit, Diego Aguilar, Kendall Carnahan, and Michael Okafor, claim that the defendants have formed a “Pump Enterprise” that functions as a coordinated racketeering scheme under the Racketeer Influenced and Corrupt Organizations Act. Pump.fun is described as a front-facing slot machine cabinet where users deposit SOL currency for unpredictable token outcomes. The platform allegedly allows minors to engage in speculative trading without age verification or KYC screening.
Jito Labs is accused of rigging the games by monitoring profitable transactions and sending them to the highest bidders through Maximal Extractable Value bundling. Solana Labs and the Solana Foundation are alleged to provide the blockchain infrastructure and monetize each wager through the sale of block space and validator fees. The lawsuit further claims that the enterprise promoted a deceptive “fair launch” narrative while allowing insider front-running through Jito bundles.
In addition to these allegations, Pump.fun is accused of facilitating intellectual property theft by creating tokens that impersonate publicly traded companies like Apple, Tesla, and Meta, as well as using celebrity names without authorization. The Lazarus Group, a sanctioned cybercrime unit, allegedly used Pump.fun to launder $1.08 million from cryptocurrency theft.
Financially, Pump.fun has been highly successful, generating over $722 million in revenue while inflicting estimated losses of between $4 billion and $5.5 billion on retail traders. The platform collects fees on every trade and has introduced a revenue-sharing model for token creators. Court documents reveal that Pump.fun earned over $400 million in fee revenue in 2024 alone, with Jito Labs capturing over $633 million in user-paid tips.
Despite its financial success, Pump.fun has faced legal battles as its native PUMP token failed to meet expectations upon launch. The token crashed 30% within 24 hours and has lost nearly 50% of its value since launch. Founder Alon Cohen’s recent confirmation that no immediate token airdrop is planned caused further decline in the token’s value.
In light of these developments, plaintiffs in the class action lawsuit seek class certification, compensatory damages, treble damages under RICO violations, appointment of a federal equity receiver, and permanent injunctions preventing defendants from operating similar platforms without required licenses and compliance controls. The legal battle between Pump.fun and its accusers continues to unfold, shedding light on the murky world of memecoin platforms.