- Pump.fun faces $5.5 billion lawsuit accusing it of operating like a “slot machine cabinet” with no real utility.
- Solana Labs, Solana Foundation, and Jito Labs allegedly monetized fees and MEV from the scheme.
- Two early investors dumped over $160M in PUMP tokens, triggering fears of a wider sell-off, according to BitMEX Research.
A bombshell amended lawsuit has intensified scrutiny on Pump.fun and its Solana-based infrastructure, accusing them of operating an “unlicensed digital casino” and extracting over $5.5 billion through a memecoin ecosystem resembling a “rigged slot machine.”
Filed in the Southern District of New York, the complaint targets pseudonymous developer Bernie, parent company Baton Corp., and Solana-linked entities including Solana Labs, Solana Foundation, Jito Labs, and the Jito Foundation.
The filing accuses the defendants of running a fast-paced “buy-dump-collapse” cycle disguised as decentralized innovation. According to the suit:
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“There is no underlying project, product, or revenue — only a fast-moving cycle of buying, dumping, and collapse.”
Pump.fun is framed as the visible interface of this operation, allegedly preying on users through hype, volatility, and guerrilla marketing.The revised complaint introduces severe charges under the Racketeer Influenced and Corrupt Organizations Act (RICO), along with fraud, civil conspiracy, aiding and abetting, and unjust enrichment.
A recent post on X by Pump.fun. Source: Pump.fun
Solana & Jito under fire
Plaintiffs assert that Solana Labs and Solana Foundation directly benefited from the alleged scheme by monetizing validator fees, block space, and SOL price appreciation. Meanwhile, Jito Labs and its foundation are accused of profiting through MEV (Maximum Extractable Value) strategies used during Pump.fun’s memecoin trading frenzy.
Originally filed in January, the lawsuit claims Pump.fun generated over $500 million in fees by exploiting demand for speculative tokens, many of which sold out in minutesOn Tuesday, fears of a broader sell-off emerged after two early investors — “PUMP Top Fund 1” and “Top Fund 2” — moved over $160 million worth of tokens to exchanges, according to BitMEX Research and on-chain tracking data.
BitMEX data shows nearly 60% of presale participants have now exited their positions. Analysts attribute the drop to the token’s aggressive unlock schedule, which has outpaced market absorption despite initial hype.
Source:Trading View
