Piecing Together a Year-Long Legal Battle: How the Pump.fun Lawsuit Exposed a Web of Allegations Across Solana's Ecosystem

The Pump.fun saga reads like a legal thriller—what started as individual investor complaints about meme coin losses has spiraled into a sprawling class action lawsuit implicating an entire blockchain ecosystem. Nearly a year into the battle, we’re finally getting a clearer picture of what’s at stake, and the evidence is only just beginning to surface.

The Trigger: One Investor’s $231 Loss Sparked It All

On January 16, 2025, investor Kendall Carnahan filed the opening salvo in the U.S. Southern District Court of New York. His grievance seemed modest on the surface—a $231 loss from purchasing $PNUT tokens on Pump.fun. But his legal complaint packed a punch: he alleged that Pump.fun and its three founders were selling unregistered securities in direct violation of the Securities Act of 1933.

Two weeks later, another investor, Diego Aguilar, filed a parallel lawsuit covering a broader range of tokens ($FRED, $FWOG, $GRIFFAIN, and others) issued through the platform. What seemed like separate cases targeting the same defendants quickly caught the attention of Judge Colleen McMahon of the Southern District of New York.

When Cases Collide: The Judge’s Merging Decision

By June 2025, Judge McMahon made a tactical call that would reshape the lawsuit’s trajectory. Rather than litigate two similar cases simultaneously, she ordered them consolidated on June 26. In doing so, she appointed Michael Okafor—who had suffered approximately $242,000 in losses from Pump.fun transactions—as the lead plaintiff for the unified class action.

This merger was significant not just procedurally, but symbolically. It signaled that the court viewed these claims as part of a cohesive grievance, not isolated incidents. Pump.fun’s three founders—Alon Cohen (COO), Dylan Kerler (CTO), and Noah Bernhard Hugo Tweedale (CEO), plus their operating company Baton Corporation Ltd—now faced a unified front of investors.

The Plot Thickens: Expanding Defendants to Solana and Jito

The real seismic shift came on July 23, 2025, when plaintiffs filed a “Consolidated Amended Complaint” that dramatically broadened the defendant roster. This time, they didn’t stop at Pump.fun—they directly named Solana Labs, the Solana Foundation, and Jito Labs as co-conspirators.

The plaintiffs’ allegation was bold: Pump.fun doesn’t operate in isolation. Instead, it functions within a closely coordinated ecosystem where Solana provides blockchain infrastructure and Jito supplies MEV (Maximal Extractable Value) technology that allows insiders to front-run ordinary traders. Together, they’ve allegedly built a system that appears decentralized but operates as a controlled casino.

Five Layers of Accusations: From Securities Violations to Money Laundering

Piecing together the court filings reveals allegations that go far deeper than simple investment losses:

1. Unregistered Securities Sales The plaintiffs invoke the Howey Test—a decades-old legal framework for identifying securities—to argue that all meme tokens issued on Pump.fun are investment contracts requiring SEC registration. Pump.fun never filed such registrations, allegedly violating Sections 5, 12(a)(1), and 15 of the Securities Act of 1933.

2. Operating an Illegal Gambling Enterprise The lawsuit characterizes Pump.fun as a “Meme Coin Casino” where users’ SOL purchases are essentially bets with outcomes driven by speculation rather than token utility. Pump.fun’s 1% transaction fee mirrors casino rake, according to the complaint.

3. Wire Fraud and Deceptive Practices While promoting “Fair Launch,” “No Presale,” and “Rug-proof” mechanisms, Pump.fun allegedly concealed its integration of Jito’s MEV tools. This allowed insiders willing to pay premium “tips” to execute trades before regular users—a practice known as front-running—then capture profits from the resulting price movements.

4. Money Laundering and Unlicensed Money Transmission The plaintiffs allege Pump.fun facilitated funds transfer without proper licensing and, more controversially, claim it assisted the North Korean hacker group Lazarus Group in laundering stolen cryptocurrency. In one cited example, hackers allegedly issued a “QinShihuang” meme token to mix illicit proceeds with legitimate retail trading.

5. Complete Absence of Investor Safeguards Unlike regulated financial platforms, Pump.fun operates with no KYC (Know Your Customer) processes, no AML (Anti-Money Laundering) protocols, and no age verification—fundamental protections entirely absent.

The RICO Escalation: From Individual Complaints to Organized Crime Framework

By August 21, 2025, plaintiffs submitted a “RICO Case Statement” that reframed the entire lawsuit. They formally accused all defendants of operating a “racketeering enterprise”—the same legal framework used against organized crime syndicates. This wasn’t incremental legal strategy; it was a fundamental recasting of the defendants as participants in coordinated fraud rather than independent operators making questionable choices.

The Evidence Game-Changer: 15,000 Chat Logs Emerge

Everything shifted after September 2025. A confidential informant provided plaintiffs’ attorneys with internal communication records—first around 5,000 messages, later supplemented by over 10,000 additional logs and supporting documents. According to court filings, these allegedly come from internal channels between Pump.fun, Solana Labs, and Jito Labs.

These chat logs reportedly detail:

• Technical coordination between Pump.fun and Solana Labs beyond typical developer relationships
• How Jito’s MEV tools were embedded into Pump.fun’s trading system
• Discussions about “optimizing” trading processes (plaintiffs allege this euphemism masks market manipulation)
• Evidence of insiders leveraging information advantages for trading gains

On December 9, 2025, Judge McMahon approved the plaintiffs’ request to file a “Second Amended Complaint” incorporating this evidence. However, processing 15,000+ messages—many requiring translation and legal analysis—proved time-intensive. The court granted an extension, pushing the deadline to January 7, 2026.

The Market’s Muted Response

What’s striking amid this legal firestorm is the crypto market’s relative indifference. While the PUMP token has collapsed from its all-time high (down approximately 78%), this reflects broader meme coin market weakness rather than lawsuit-specific panic. Current PUMP pricing shows significant depreciation, with 24-hour trading volume at $4.12M, down sharply from the January 2025 frenzy when Pump.fun’s weekly volume exceeded $3.3 billion.

SOL (SOL) has maintained resilience, currently trading around $141.94 without dramatic lawsuit-induced volatility. This suggests markets view the litigation as a distinct Pump.fun problem rather than a systemic Solana ecosystem threat.

Notably, Pump.fun’s founding team has gone silent. Alon Cohen’s social media presence—previously constant—has been dormant for over a month, a striking contrast to his historically active engagement. Meanwhile, Solana and Jito executives have issued no public statements addressing the allegations.

Interestingly, Pump.fun hasn’t halted its buyback operations. The platform continues its daily token buyback program, having accumulated approximately $216 million in repurchases so far, absorbing roughly 15.16% of circulating supply. Whether this reflects confidence or a last-ditch effort to maintain token stability remains contested.

The Unanswered Questions Heading Into 2026

As January 7, 2026 approaches, critical mysteries remain:

• Who is the whistleblower? A disgruntled employee? A competitor with strategic motivation? Or something else entirely?
• What do those 15,000 messages actually prove? Are they smoking-gun evidence of intentional conspiracy, or normal business communications weaponized through selective interpretation?
• How will defendants respond? Legal strategy from Pump.fun, Solana Labs, and Jito Labs remains publicly invisible.

The Second Amended Complaint arriving in 2026 could reshape not just this case, but crypto industry conversations around fairness, decentralization claims, and regulatory accountability. The chat logs—assuming their authenticity holds scrutiny—may either validate years of skepticism about platform fairness or demonstrate that normal business coordination gets criminalized through aggressive legal framing.

What began as disgruntled investors seeking redress for trading losses has transformed into something far larger: a referendum on whether decentralized finance’s foundational promises survive legal examination. The coming months will tell us whether those 15,000 messages contain smoking guns or just routine operational discussions caught in litigation’s crosshairs.