Pump.fun litigation: allegations, procedure and the following correction

Pumpfun, the Solana Foundation, and the founders.

What was obvious has now reached the courtroom.
The 5.5 Billion USD RICO Case.

Here is everything summarized that is known so far:

In July 2025, a consolidated class action lawsuit was filed in the US District Court for the Southern District of New York accusing Pumpfun and the Solana ecosystem of operating a coordinated illegal scheme that allegedly wiped out between 4 and 5.5 billion USD of retail investor capital. The case frames Pumpfun not as a neutral launchpad, but as a deliberately engineered digital casino embedded into Solana’s core infrastructure.

The plaintiffs rely on US securities law, federal RICO statutes, and New York consumer protection law. If successful, the defendants face treble damages under RICO. That would raise potential liability to approximately 16.5 billion USD.

Pumpfun launched in January 2024 and quickly became the dominant memecoin factory on Solana. According to the complaint, the platform generated more than 850 million USD in cumulative fee revenue within roughly 14 months. The mechanism was simple. Anyone could mint and trade tokens without identity verification, disclosures, or risk warnings. Pumpfun charged a 1 percent fee on every transaction.

Between January 2024 and March 2025, users launched more than 7 million tokens. Approximately 98.6 percent of them collapsed to near zero value. Plaintiffs argue that this failure rate was not accidental but intrinsic to the system design, which allegedly maximised churn and fee extraction rather than sustainable markets.

The lawsuit describes Pumpfun as an unlicensed gambling platform where users bet on random price movements without regulatory oversight, disclosures, or consumer protections.

Baton Corporation Ltd., the UK based operator of Pumpfun, is led by three founders in their early 20s. CEO Noah Bernhard Hugo Tweedale is 21.
CTO Dylan Kerler is 21.
COO Alon Cohen is 23. All three are named individually as defendants.

Under Section 15 of the Securities Act, the plaintiffs argue that the founders acted as control persons and knowingly facilitated the sale of unregistered securities. The complaint alleges no SEC registration, no prospectuses, and no meaningful disclosure of risks to retail users.

The original lawsuit filed in January 2025 targeted only Baton Corporation and its founders. The July 2025 consolidated complaint dramatically expanded the scope.

New defendants include Solana Labs, the Solana Foundation, and senior leadership figures such as Anatoly Yakovenko, Raj Gokal, and Solana Foundation president Lily Liu.

The plaintiffs claim that Solana provided not just neutral infrastructure but active technical coordination that enabled Pumpfun’s scale and behaviour. This alleged coordination forms the backbone of the RICO enterprise theory.

The complaint accuses the defendants of forming a criminal enterprise referred to as the Pump Enterprise. Alleged predicate acts include wire fraud, securities fraud, unlicensed money transmission, and facilitation of illegal gambling.

RICO was originally designed to combat organised crime. Its application here signals that the plaintiffs view the memecoin economy not as a regulatory grey area but as systemic financial exploitation.

A key escalation occurred in September 2025. Plaintiffs obtained more than 5000 internal chat messages from a confidential informant. According to court filings, these logs allegedly document direct communication between Solana Labs engineers and Pumpfun personnel.

The discussions reportedly cover token program behaviour, validator mechanics, priority inclusion paths, and launch flow design. Plaintiffs argue this proves intentional coordination rather than passive infrastructure provision.

Shortly after these logs surfaced, Jito Labs and the Jito Foundation were voluntarily dismissed from the case without settlement. The court confirmed no compensation or concessions were exchanged. The plaintiffs stated they were narrowing the case to focus on Pumpfun and Solana.

Court decision in December 2025:
On December 16 2025, Judge Colleen McMahon granted the plaintiffs permission to file a second amended complaint. This allows them to restructure their allegations using the leaked communications and to further detail how the platform architecture allegedly prioritised extraction over fairness.

The deadline to file the amended complaint is December 19 2025. Defendants must respond with motions to dismiss by January 23 2026. Plaintiffs must reply by February 13 2026.

If the amended complaint survives dismissal, the case becomes one of the most consequential enforcement actions ever aimed at crypto infrastructure rather than individual tokens.

Beyond RICO, the lawsuit argues that Pumpfun tokens qualify as securities under the Howey test. Plaintiffs claim users invested money in a common enterprise with an expectation of profit driven by the platform’s marketing, visibility mechanics, and network effects.

They allege violations of Sections 5a and 5c of the Securities Act due to the sale of unregistered securities. Additional claims include deceptive business practices under New York General Business Law Sections 349 and 350 and unjust enrichment.

This lawsuit directly challenges the long held assumption that blockchain infrastructure providers are analogous to neutral hosting services. If the court accepts the plaintiffs’ theory, blockchain foundations and protocol developers could face liability for downstream economic activity enabled by their systems.

For Solana, the stakes are existential. Beyond financial exposure, the case threatens its reputation as a leading Layer 1 network. More broadly, it could redefine legal responsibility across memecoin platforms, launchpads, and high throughput blockchains.

At the same time, the outcome is uncertain. Recent rulings in cases involving Ripple and Coinbase have narrowed the application of securities law to secondary market transactions. Regulatory enforcement by the SEC has also slowed under the current administration.

This case sits at the intersection of infrastructure design, behavioural finance, and systemic risk. Regardless of outcome, it marks a turning point in how memecoin economies are legally and morally evaluated.

Let’s see what happens. What are your thoughts on this?

These are some of the sources I used for this tweet:

Crypto Valley Journal, December 17 2025
https://t.co/PB95Mx3XUU

US District Court SDNY filings
https://t.co/12IwLtXeOg

Securities Act of 1933
https://t.co/WSyLX7ou5m

RICO Act
https://t.co/3cfT7GMd1V

New York General…

I want to take some fire out of the RICO lawsuit narrative around PumpFun with facts.

No, Solana is not finished.

Stop exaggerating..

🔺First. No court has ruled on facts

A federal court allowing a second amended complaint to proceed is a procedural step. It is not a judgment, not a confirmation of wrongdoing, and not a statement that the claims are true. Courts allow amended complaints all the time.

🔺Second. “This might be the end for Solana” is pure fear framing.

There is no legal, technical, or economic basis to claim Solana could drop below $5 within 2 years based on a class action amendment. That is speculation presented as inevitability.

🔺Third. Allegations are treated as established reality.

MEV, validator advantages, transaction ordering and insider access are plaintiff allegations. The tweet narrates them as if they are proven facts. That is misleading.

🔺Fourth. The “U.S. court says there is enough here” claim is false.

The court did not say the system is corrupt or illegal. It only said plaintiffs may refine and refile their arguments. That distinction matters.

🔺Fifth. Solana infrastructure is not on trial.

The complaint attempts to link application level behavior to infrastructure design. That argument being made is not the same as it being accepted. No court has ruled that Solana’s architecture itself violates securities or market fairness laws.

🔺Sixth. Insider supply numbers are unsubstantiated.

The claim that 45–55% of circulating SOL is held by insiders is asserted without sourcing and conflates early allocations with current circulating ownership. This is a classic narrative shortcut.

🔺Seventh. Comparing Solana to FTX, Luna, or Celsius is emotional manipulation.

Those collapses involved centralized fraud, leverage, or algorithmic death spirals. A lawsuit alleging unfair access is not the same category of failure.

🔺Eighth. “First time core architecture is questioned” is overstated.

Plaintiffs questioning design choices in a complaint is not the same as a court questioning core architecture. No legal finding has been made.

This is a lawsuit narrative escalation, not a systemic death sentence.

The risk is reputational and legal uncertainty, not instant collapse. Turning procedural court developments into apocalyptic price predictions is engagement farming, not analysis.

I am a Solana builder myself, and I genuinely wish the chain all the best.

I still hope this lawsuit has consequences, not to kill Solana, but to shake up the rotten-to-the-top culture driven by people, not by the technology.

Solana does not need fewer builders.
It needs fewer mindless gamblers and extractors, and more real builders being supported.