Solana and Pump.fun Accused of Operating an Illegal Gambling Scheme
The law firm Burwick Law has filed a class-action lawsuit against meme token launchpad Pump.fun and developers behind the Solana blockchain, accusing them of running a racketeering operation disguised as an unlicensed digital casino.
Core Allegation: Meme Tokens as Slot Machines
The suit, filed in the U.S. District Court for the Southern District of New York, alleges that Pump.fun operates like a “slot machine front-end,” mass-producing tokens without transparency or investor safeguards. Users could anonymously launch and trade tokens—creating what plaintiffs describe as a “structurally rigged environment.”
According to the filing, the system includes:
- bonding-curve based automatic pricing mechanisms;
- anonymous access through non-KYC wallets;
- preferential trading access for insiders and bots.
Plaintiffs claim this model transformed meme token trading into a form of unlicensed gambling, where regular users have little chance of success.
Entities Named in the Suit
The complaint names over a dozen defendants, including:
| Entity | Alleged Role |
|---|---|
| Solana Labs | Profiting from transaction fees and SOL price appreciation |
| Solana Foundation | Monetizing user activity |
| Jito Labs | Enabling front-running through validator control |
| Jito Foundation | Participation in the alleged unlawful scheme |
Financial Losses and Scope
Plaintiffs estimate that users have lost between $4 billion and $5.5 billion trading meme tokens via Pump.fun and related platforms. The lawsuit references blockchain data and trade records as evidence.
The legal claims include:
- violations of the RICO Act (racketeering);
- wire fraud;
- false advertising;
- offering unregistered securities;
- consumer fraud under New York state law.
Burwick Law’s Track Record
Burwick Law is known for targeting crypto platforms in high-profile lawsuits. Previous cases involved tokens such as:
- PNUT — alleged influencer-driven pump and dump;
- Hawk Tuah — claims against the token’s promoters;
- $LIBRA — a token promoted by Argentine President Javier Milei, allegedly resulting in $100M in losses.
In the $LIBRA case, a U.S. court froze $58 million in USDC.
Pump.fun: Meteoric Rise and Trust Crisis
Despite the allegations, Pump.fun reached a $2 billion market cap following the launch of its native token PUMP, which raised $600 million in just 12 minutes. However, the token’s price soon fell below its initial offering level, leaving all ICO participants in the red.
PUMP dropped 15% in 24 hours to $0.003767—5% below its ICO price of $0.004.
Platform Response
As of now, Pump.fun and Solana have not issued public responses to the lawsuit. Legal experts note that in the U.S., anyone can file a suit—and even sensational claims can be dismissed at early procedural stages.
Infrastructure or Complicity?
Plaintiffs’ attorneys argue that Solana and Jito were not merely “neutral tech providers” but active participants in the scheme. This challenges the long-standing assumption that blockchain infrastructure is purely technical and legally insulated.
As attorney and reputation risk expert Andrew Rossow put it:
“If your platform enables activity in a legal grey area, eventually you’ll end up in the spotlight—whether you like it or not. Permissionless doesn’t mean consequence-free.”
Conclusion
The class-action lawsuit against Pump.fun and Solana highlights the increasing legal exposure of crypto platforms, especially those offering token creation and trading tools. If Burwick Law’s arguments hold in court, the outcome could have far-reaching implications for the entire Solana ecosystem.