Solana Labs and Jito Labs have found themselves in hot water as co-defendants in a recently amended federal lawsuit that alleges their involvement in a massive $1.5 billion fraud related to the Solana-based memecoin launchpad Pump.Fun.
The amended lawsuit, filed by Burwick Law in the Southern District of New York on July 22, expands on a previous case that initially targeted Pump.Fun and its affiliates. The new allegations claim that Solana Labs and Jito Labs were not just passive infrastructure providers but active participants in what is being described as a fraudulent online gambling and money transmission scheme.
According to the lawsuit, the two firms are accused of knowingly facilitating Pump.Fun’s business operations, which included launching tokens at a rapid pace and extracting fees from retail traders. The project is said to have operated as a disguised gambling system without regulatory compliance, investor protections, or identity verification, which allowed for illicit activities such as money laundering.
The lawsuit specifically highlights an incident involving the Lazarus Group, a North Korea-linked organization, using Pump.Fun’s infrastructure to launch a memecoin called “QinShihuang” and funnel funds from the Bybit exchange hack. The trading volume of the coin reportedly reached $26 million shortly after launch, enabling the group to convert the proceeds into Solana’s native token, SOL.
Burwick also claims that Solana Labs and its foundation, based in Switzerland, structured their activities to evade U.S. regulatory oversight while still benefiting from U.S.-based trading volume and market activity. Jito Labs is alleged to have provided validator and MEV tooling that allowed the system to scale and profit from user activity.
In addition to operating without proper licensing, all named parties in the lawsuit are now being charged under the Racketeer Influenced and Corrupt Organizations (RICO) Act. The filing alleges a coordinated enterprise aimed at generating revenue through pseudonymous trading activity while bypassing laws designed to protect consumers and ensure fair financial practices.
The lawsuit also points out a decline in Pump Fun’s usage metrics, including a decrease in daily token launches and trading volume. Competitor Bonk Fun has reportedly surpassed Pump Fun in market share, with $165 million in daily volume compared to Pump.Fun’s $41 million.
While the claims of unregistered securities are specific to Pump.Fun, Burwick has added fraud, deceptive marketing, and unjust enrichment counts against all co-defendants, arguing that they profited from an ecosystem built on speculative hype and regulatory evasion.