After the meme coin frenzy subsided, Pump.fun faces five major allegations including scam, fraud, and money laundering

This article is reprinted from Deep潮, original title: Pump.fun Litigation Year in Review: Mysterious Informants, Internal Records, and Unveiled Answers

The core allegations are more than just “losing money.”

In January 2025, the meme coin market was at the peak of frenzy. As U.S. President Trump announced the TRUMP coin, an unprecedented speculative craze swept through, and the wealth myth of “hundredfold coins” captured market attention.

At the same time, a lawsuit targeting the Pump.fun platform was quietly initiated.

Fast forward to recent days.

Alon Cohen, co-founder and COO of Pump.fun, has not spoken on social media for over a month. For someone usually active and always online “surfing and gossiping,” this silence is particularly noticeable. Data shows that Pump.fun’s weekly trading volume has plummeted from a peak of $3.3 billion in January to the current $481 million, a decline of over 80%. Meanwhile, the PUMP price has fallen to $0.0019, about 78% below its all-time high.

Looking back to July 12 months ago, the situation was completely different. Pump.fun’s public sale was issued at a uniform price of $0.004 per token, sold out within 12 minutes, raising about $600 million, pushing market sentiment to a fever pitch.

From the lively start of the year to the current coldness, market attitudes have formed a stark contrast.

Amid all these changes, the only thing that hasn’t stopped is the buyback plan. The Pump.fun team continues to execute the daily repurchase plan. To date, the total repurchased amount has reached $216 million, absorbing about 15.16% of the circulating supply.

Meanwhile, the lawsuit that was overlooked during the market frenzy is now quietly swelling.

It all started with $PNUT losses

The story begins in January 2025.

On January 16, investor Kendall Carnahan filed a lawsuit in the Southern District of New York Court, case number: Carnahan v. Baton Corp.(, directly targeting Pump.fun and its three founders. Carnahan’s claim is clear: after purchasing ) tokens on the platform, he suffered losses, and accused Pump.fun of selling unregistered securities, violating the U.S. Securities Act of 1933.

According to court documents, this investor’s actual loss was only $231.

Just two weeks later, on January 30, another investor, Diego Aguilar, filed a similar lawsuit (case number: Aguilar v. Baton Corp.). Unlike Carnahan, Aguilar purchased more types of tokens, including $FRED, $FWOG, $PNUT , and other meme coins issued on Pump.fun. His lawsuit has a broader scope, representing all investors who bought unregistered tokens on the platform.

At this point, the two cases are proceeding independently, with the same defendants:

Pump.fun’s operating company Baton Corporation Ltd and its three founders: Alon Cohen (COO), Dylan Kerler (CTO), and Noah Bernhard Hugo Tweedale (CEO).

The two cases were merged, with the largest loss holder becoming the lead plaintiff

The two separate lawsuits quickly drew the court’s attention. Judge Colleen McMahon of the Southern District of New York noticed an issue: both cases target the same defendants, the same platform, and the same illegal conduct. Why are they being tried separately?

On June 18, 2025, Judge McMahon directly questioned the plaintiff’s legal team:

Why are there two separate lawsuits addressing the same issue? She asked the lawyers to explain why these cases should not be consolidated.

Initially, the plaintiffs’ lawyers argued that they could keep two separate cases—one focusing on $GRIFFAIN tokens, and the other on all tokens on Pump.fun—and suggested appointing two lead plaintiffs.

But the judge was not convinced. This “divide and conquer” strategy would waste judicial resources and could lead to contradictory rulings. The key point is that all plaintiffs face the same core issue: they allege Pump.fun sold unregistered securities and consider themselves victims of the same scam system.

On June 26, Judge McMahon ordered the cases to be officially merged. Simultaneously, under the Private Securities Litigation Reform Act (PSLRA)$PNUT , she appointed Michael Okafor, who suffered the largest loss—about $242,000 according to court records—as the lead plaintiff.

With this, previously fragmented investors formed a united front.

The focus shifts to Solana Labs and Jito

Just one month after the case was merged, the plaintiffs dropped a heavy bomb.

On July 23, 2025, they submitted a “Consolidated Amended Complaint,” dramatically expanding the list of defendants. This time, the focus was no longer solely on Pump.fun and its founders but directly targeted key players in the entire Solana ecosystem.

New defendants include:

Solana Labs, Solana Foundation, and their senior executives (Solana defendants): The plaintiffs allege that Solana is not just providing blockchain technology. Court documents reveal close technical coordination and communication between Pump.fun and Solana Labs, far beyond typical developer-platform relationships.

Jito Labs and its senior executives (Jito defendants): The plaintiffs believe that Jito’s MEV technology allows insiders to pay extra fees to prioritize their transactions, enabling them to buy tokens before ordinary users and profit risk-free.

The plaintiffs’ strategy is clear: they aim to prove that Pump.fun, Solana, and Jito do not operate independently but form a tight利益共同體 (interest community). Solana provides the blockchain infrastructure, Jito supplies MEV tools, and Pump.fun runs the platform—together constructing a system that appears decentralized but is actually manipulated.

Core allegations are more than just “losing money”

Many might think this is simply a group of investors angrily protesting their losses. But a close reading of hundreds of pages of court documents reveals that the plaintiffs’ accusations point to a carefully designed scam system.

First allegation: Selling unregistered securities

This is the legal foundation of the entire case.

The plaintiffs argue that all meme coins issued on Pump.fun are essentially investment contracts. According to the Howey Test, these tokens meet the definition of securities. Yet, the defendants never filed any registration statement with the U.S. Securities and Exchange Commission (SEC) before publicly selling these tokens, violating Sections 5, 12(a), and 15 of the Securities Act of 1933.

The platform also used a “bonding curve” mechanism to sell tokens without disclosing necessary risk information, financial status, or project background—information required for registered securities offerings.

Note: The Howey Test(, established by the U.S. Supreme Court in SEC v. W.J. Howey Co. (1946), is a legal standard used to determine whether a transaction or scheme constitutes an “investment contract.” If it meets the criteria, the asset is considered a “security” and must be regulated by the SEC, including registration and disclosure under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Second allegation: Operating an illegal gambling enterprise

The plaintiffs define Pump.fun as a “meme coin casino”)Meme Coin Casino(. They point out that users investing SOL to buy tokens are essentially “placing bets,” with outcomes mainly dependent on luck and market speculation rather than the tokens’ actual utility. The platform acts as the “house,” taking a 1% fee from each transaction, similar to a casino’s cut.

Third allegation: Telecom fraud and false advertising

Pump.fun publicly promotes “Fair Launch”)Fair Launch(, “No Presale”)No Presale(, and “Rug-proof”)Rug-proof(, giving the impression that all participants are on equal footing. But in reality, this is a complete lie.

Court documents reveal that Pump.fun secretly integrated Jito Labs’ MEV technology. This means insiders aware of the “inside information” and willing to pay extra “tips” can use “Jito bundles”)Jito bundles( to front-run transactions, buying tokens before regular users and selling for profit after prices rise—so-called front-running.

Fourth allegation: Money laundering and unlicensed remittances

The plaintiffs accuse Pump.fun of accepting and transferring large sums of money without any remittance licenses. Court documents claim the platform even assisted North Korean hacker group Lazarus Group in laundering stolen funds. Specifically, hackers issued a meme coin called “QinShihuang” (Qin Shi Huang) on Pump.fun, using the platform’s high traffic and liquidity to mix “dirty money” with legitimate retail investor funds.

Fifth allegation: Complete lack of investor protection

Unlike traditional financial platforms, Pump.fun has no “Know Your Customer” (KYC) procedures, anti-money laundering (AML) protocols, or even basic age verification.

The core argument of the plaintiffs can be summarized in one sentence: this is not a normal investment affected by market fluctuations, but a scam system designed from the start to cause retail investors to lose money and insiders to profit.

This expansion signifies a fundamental shift in the nature of the lawsuit. The plaintiffs are no longer content with accusing Pump.fun alone but describe it as part of a larger “criminal network.”

One month later, on August 21, the plaintiffs further submitted a “RICO Complaint,” formally alleging that all defendants constitute a “racketeering enterprise,” operating a manipulated “meme coin casino” through Pump.fun’s surface as a “Fair Launch Platform.”

The plaintiffs’ logic is clear: Pump.fun does not operate independently. Behind it are Solana providing blockchain infrastructure, Jito offering MEV tools, and Pump.fun running the platform—forming a tight利益共同體 (interest community) that defrauds ordinary investors.

But what evidence do the plaintiffs have to support these claims? The answer was revealed months later.

Key evidence: Mysterious informant and chat records

After September 2025, the nature of the case changed fundamentally.

Because the plaintiffs obtained concrete evidence.

A “confidential informant”)confidential informant( provided the plaintiff’s legal team with the first batch of internal chat records, about 5,000 messages. These purportedly come from internal communication channels of Pump.fun, Solana Labs, and Jito Labs, documenting technical coordination and business dealings among the three parties.

The appearance of this evidence was a treasure for the plaintiffs. Previously, all allegations about technical collusion, MEV manipulation, and insider trading were based on speculation, lacking direct proof.

These internal chat records are claimed to demonstrate a “conspiratorial relationship” among the three.

One month later, on October 21, this informant provided a second batch of documents, more astonishing—over 10,000 chat records and related files. These materials reportedly detail:

• How Pump.fun coordinated technical integration with Solana Labs

• How Jito’s MEV tools were embedded into Pump.fun’s trading system

• How the three parties discussed how to “optimize” trading processes (the plaintiffs believe this is a euphemism for market manipulation)

• How insiders exploited information advantages for trading

Plaintiffs’ lawyers stated in court documents that these chat records “expose a carefully designed scam network,” proving that Pump.fun, Solana, and Jito are far more than just “technology partners.”

Second amended complaint filing

Faced with such massive new evidence, the plaintiffs needed time to organize and analyze. On December 9, 2025, the court approved their request to file a “Second Amended Complaint,” allowing them to include these new materials.

But the problem was, over 15,000 chat records needed to be reviewed, filtered, translated) (some content may not be in English)(, and analyzed for legal significance—a huge workload. Coupled with the upcoming Christmas and New Year holidays, the plaintiffs’ legal team clearly lacked sufficient time.

On December 10, the plaintiffs filed a motion requesting an extension to submit the Second Amended Complaint.

Just one day later, on December 11, Judge McMahon approved the extension. The new deadline was set for January 7, 2026. This means that after the New Year, a potentially more explosive Second Amended Complaint will be presented in court.

Current status of the case

As of now, nearly a year into the lawsuit, the real battle has just begun.

On January 7, 2026, the plaintiffs will submit the Second Amended Complaint containing all new evidence. We will see what those 15,000 chat records reveal. Meanwhile, the defendants remain surprisingly silent. Co-founder Alon Cohen has not spoken publicly for over a month, and senior executives of Solana and Jito have made no public responses to the lawsuit.

Interestingly, despite the expanding scale and influence of this lawsuit, the crypto market seems largely indifferent. Solana’s price has not experienced drastic fluctuations due to the lawsuit; although the token’s price continues to decline, it is more due to the overall collapse of meme coin narratives rather than the lawsuit itself.

Epilogue

This lawsuit, triggered by losses from meme coin trading, has evolved into a class action against the entire Solana ecosystem.

It has gone beyond “a few investors fighting for their rights after losing money.” It touches on the core issues of the crypto industry: Is decentralization real, or just a carefully crafted illusion? Is fair launch truly fair?

However, many key questions remain unresolved:

Who exactly is that mysterious informant? A former employee? A competitor? Or an undercover regulator?

What is contained in the 15,000 chat records? Conclusive evidence of conspiracy, or just normal business communication taken out of context?

How will the defendants defend themselves?

In 2026, with the submission of the Second Amended Complaint and the case progressing, we may get some answers.

This article, “After the Meme Coin Frenzy, Pump.fun Faces Allegations of Fraud, Money Laundering, and Five Other Major Crimes,” first appeared in Chain News ABMedia.