A new class-action lawsuit accuses the popular memecoin platform Pump.fun of operating as a massive gambling scheme, allegedly extracting over $5.5 billion from users. The amended complaint, filed in the Southern District of New York, names Pump.fun's operators, including its pseudonymous developer Bernie, parent company Baton Corp., and key infrastructure partners like Solana Labs, the Solana Foundation, Jito Labs, and the Jito Foundation as defendants.
Allegations of a Rigged Slot Machine
The lawsuit contends that Pump.fun functions as a "front-facing slot machine cabinet," creating a deceptive enterprise that mimics an unlicensed casino. Plaintiffs argue that the platform relies on volatility and hype rather than disclosures or investor safeguards. The structure is described as a rigged slot machine where early investors profit by selling tokens to later participants, with no underlying project or revenue, leading to a cycle of buying, dumping, and collapse.
Escalation of Claims and RICO Allegations
This amended complaint significantly broadens the scope of alleged misconduct, introducing claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Additional accusations include fraud, aiding and abetting, civil conspiracy, and unjust enrichment. The plaintiffs are seeking rescission of all Pump.fun transactions and compensatory damages for harm caused by what they describe as a rigged system.
Key Takeaways
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Pump.fun is accused of operating as an unlicensed digital casino.
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The lawsuit alleges the platform extracted over $5.5 billion from users.
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RICO Act claims have been added to the amended complaint.
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Solana and Jito entities are named as infrastructure partners facilitating the alleged scheme.
Role of Solana and Jito Infrastructure
The lawsuit highlights the involvement of Solana-affiliated entities, asserting that Solana Labs and the Solana Foundation provided the necessary blockchain infrastructure and profited from user activity through block space sales and SOL token appreciation. Jito Labs and the Jito Foundation are accused of enabling front-running and earning revenue via maximum extractable value strategies tied to memecoin trading on Pump.fun.
Previous Lawsuit and Market Reaction
The case was originally filed in January, initially claiming Pump.fun used guerrilla marketing to create artificial urgency for volatile tokens, generating nearly $500 million in fees. This legal action comes as the PUMP token has experienced significant price drops, with early investors offloading substantial amounts, raising concerns about a broader sell-off. Nearly 60% of PUMP presale participants have reportedly sold or transferred their tokens.
Sources
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Pump.fun Lawsuit Alleges $5.5B Slot Machine-Like Scheme, Cointelegraph.
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Solana, Pump.fun Named in Amended RICO Suit Alleging $5.5B Meme Coin Gambling Scheme, Decrypt.
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