The legal battle of Pump.fun: When "fair launch" becomes a scam game

From a platform dubbed “Fair Launch” that developed rapidly, Pump.fun has now become the focus of a massive class-action lawsuit. With over 15,000 internal chat logs leaked, this case is no longer just a simple dispute but has evolved into a judgment on the entire Solana ecosystem.

From Value Collapse to Comprehensive Allegations

The numbers tell all. The PUMP token once reached its peak, but has now lost 78% of its value. Weekly trading volume on the platform also plummeted from $3.3 billion to just $481 million. This collapse is not only related to Meme market volatility but signals deeper issues.

The story begins with ordinary investors. Kendall Carnahan lost only $231 when purchasing PNUT tokens but decided to file a lawsuit. Following that was Diego Aguilar, who lost $242,000 in token transactions issued on Pump.fun. These two separate lawsuits were quickly consolidated into a class action.

Main Allegations: A Designed Scam System

Plaintiffs do not accuse Pump.fun of being a mere ordinary trading platform. Instead, they point out that:

Unregistered Securities Sales: All Meme tokens on Pump.fun are essentially investment contracts under the Howey Test. However, they are sold publicly without any registration with the SEC, violating the Securities Act of 1933. The platform uses a bonding curve mechanism but completely fails to disclose risk information or the project’s financial status.

Illegal Casino Operations: Depositing SOL to buy tokens is essentially placing bets. Pump.fun acts as a bookmaker, charging a 1% fee on each transaction, similar to an online casino.

Front-running via MEV: Pump.fun secretly integrated Jito Labs’ MEV technology. This allows those with “expertise” to use “Jito bundles” to buy tokens before regular investor transactions are executed, then immediately sell for profit. This is outright fraud.

Money Laundering: Plaintiffs allege Pump.fun helped hacker group Lazarus Group launder dirty money through issuing Meme tokens.

Lack of Investor Protections: No KYC, AML, or age verification.

Key Evidence: Internal Messages Reveal the Truth

A turning point occurred in September 2025. An anonymous whistleblower provided the plaintiffs’ lawyers with approximately 5,000 chat logs from internal communication channels of Pump.fun, Solana Labs, and Jito Labs. A month later, a second batch of documents was supplied, containing over 10,000 additional chat logs.

These messages are believed to record:

• How Pump.fun coordinated technically with Solana Labs
• The MEV tools of Jito integrated into the trading system
• How the three parties “optimized” the trading process (the plaintiffs believe this is a euphemism for market manipulation)
• How insiders exploited information advantages

The court approved the request to submit a “Second Amended Complaint” to include all this evidence. The new deadline is January 7, 2026.

The Connection Between the Three Parties: Solana, Jito, and Pump.fun

In July, the plaintiffs expanded the list of defendants to include Solana Labs, the Solana Foundation, their leaders, Jito Labs, and Jito’s executives. The plaintiffs argue that these three entities do not operate independently but form a tightly-knit “interest community.” Solana provides infrastructure, Jito supplies MEV tools, and Pump.fun operates the platform. The result is a system that appears decentralized but is actually manipulated.

In August, the plaintiffs filed a “RICO Complaint,” officially accusing all defendants of forming a “racketeering organization” and operating a “Meme casino” under the guise of a fair launch platform.

Lingering Questions

After nearly a year, many uncertainties remain:

• Who is the anonymous whistleblower? A former employee? A competitor? Or a regulatory agency?
• What do the 15,000 chat logs truly contain? Evidence of collusion or just normal exchanges?
• How will the defendants defend themselves?

Market Impact

Despite the growing scale of the lawsuit, the cryptocurrency market seems largely indifferent. Solana’s price remains stable, and the PUMP token’s decline is mainly due to the Meme story’s collapse. However, the arrows of the lawsuit have been shot, and 2026 will reveal how many targets are hit.

The fact that Pump.fun has been brought to court is not only a judgment on a trading platform but a comprehensive verdict on the concept of “fair launch” and whether decentralization truly exists in the crypto world or is merely a carefully crafted illusion.