Lawsuit Filed by Disgruntled Investors Claiming Substantial Financial Losses Against Pump.fun
In a significant development for the cryptocurrency industry, a class action lawsuit has been filed against Pump.fun in the Southern District of New York. The lawsuit, led by law firms including Burwick Law, accuses Pump.fun of operating as an "unlicensed Meme Coin Casino" or a "front-facing slot machine cabinet," engaging in deceptive and fraudulent activities [1][2][3].
The lawsuit targets Pump.fun’s operators, including pseudonymous developer Bernie, parent company Baton Corp., founders Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, as well as infrastructure partners Solana Labs, the Solana Foundation, Jito Labs, and the Jito Foundation [1][2][3]. Plaintiffs accuse the defendants of running a coordinated racketeering scheme under the Racketeer Influenced and Corrupt Organizations Act (RICO), fraud, civil conspiracy, unjust enrichment, and other claims.
The lawsuit alleges that Pump.fun's structure was rigged, benefiting early players who dumped tokens on later investors, with no real product or revenue behind it—only cycles of buying, dumping, and collapse [1][2][3]. The platform is accused of failing to implement basic safeguards such as age verification and Know Your Customer (KYC) controls, allowing minors to participate in risky trading. Jito Labs is accused of transaction manipulation via Maximal Extractable Value (MEV) bundling, profiting from user-paid tips. Solana Labs and foundation allegedly benefited from validator fees and block space sales [2][3].
Pump.fun reportedly had revenue of around $722 million, including over $400 million in fees in 2024 alone. Jito Labs earned $633 million in user-paid tips [2][3]. The lawsuit also consolidates previous class actions related to other memecoin investors, representing a broad group of victims of what is described as an illegal digital casino and gambling/money transmission scheme [3].
The amended complaint broadened claims to include violations related to money laundering—specifically alleging that North Korea’s Lazarus Group used Pump.fun to launder stolen funds from a $1.5 billion hack—and accusations of promoting tokens exploiting hate speech and violence for trading attention [3].
Burwick Law is preparing to file a lawsuit against Pump.fun on behalf of investors who allege that they have lost money on pumpdotfun memecoins. Approximately 6.1 million tokens have been launched on Pump.fun. However, specific details about the cryptocurrency used as quote currency for the total collected fees on Pump.fun were not provided.
In November, Pump.fun's developers disabled the streaming feature due to community criticism of inappropriate content. The lawsuit claims that the platform primarily benefits small pools of insiders and corrupt corporations. The outcome of the legal case against Pump.fun is not guaranteed, according to Burwick Law.
This lawsuit highlights the issue of scams and speculative meme coins in the current cryptocurrency landscape, emphasising the need for regulation and transparency in the industry. Cryptocurrencies are often accused of attracting users through promises of democratizing finance, transforming traditional systems, and empowering individuals, but cases like this one demonstrate the potential for exploitation and deceit.
Investors who allege losses from pumpdotfun memecoins are preparing to file a lawsuit against Pump.fun, alleging that the platform's structure was rigged and failed to implement safeguards such as age verification and Know Your Customer (KYC) controls, while also engaging in deceptive and fraudulent activities. This lawsuit follows claims that Pump.fun's operators, including technology partners like Solana Labs and Jito Labs, were involved in illegal activities such as racketeering, money laundering, and promoting tokens associated with hate speech and violence. By highlighting the potential for exploitation and deceit in the cryptocurrency landscape, this case underscores the need for increased regulation, transparency, and investing practices in the technology sector.
