The legal battle over Pump.fun and the online coin launch: when the chaos of meme coins meets American justice

The Decline of the Meme Coin Market and the Shadows of Legal Controversy

Less than a year ago, the online coin launch of TRUMP dominated the cryptocurrency ecosystem. In January 2025, Pump.fun’s weekly volume reached a peak of $3.3 billion, fueled by the speculative fever around meme tokens. Today, the situation is radically different. The volume has contracted to $481 million, a decline of over 80%. The PUMP token itself has suffered a 78% drawdown, dropping from its all-time high to $0.0019.

But the real change isn’t just about numbers. In the silence of the crypto community, something deeper is unfolding in American courts: a class action lawsuit that no longer only targets Pump.fun but is sweeping across the entire Solana ecosystem.

How it all started: from personal loss to systemic conspiracy

The story begins modestly. On January 16, 2025, Kendall Carnahan filed a lawsuit in the Southern District of New York. His loss: only $231 invested in the PNUT token purchased on Pump.fun. The accusation was simple: the platform was selling unregistered securities in violation of the Securities Act of 1933.

Two weeks later, on January 30, Diego Aguilar filed a very similar complaint. Unlike Carnahan, Aguilar had diversified his purchases across multiple meme tokens (FRED, FWOG, GRIFFAIN, and others), and his case was structured to represent all affected investors.

At this point, no one could have predicted the escalation. The two cases remained separate, but the defendants were always the same: Baton Corporation Ltd (the operating company of Pump.fun) and its three founders—Alon Cohen (Chief Operating Officer), Dylan Kerler (Chief Technology Officer), and Noah Bernhard Hugo Tweedale (Chief Executive Officer).

The unification: when the court orders a change of strategy

Judge Colleen McMahon quickly saw the obvious. If two lawsuits involve the same defendants, the same platform, and the same violations, why waste judicial resources keeping them separate?

On June 18, 2025, McMahon questioned the plaintiffs’ attorneys. They attempted to resist, suggesting to keep two “main plaintiffs” to address different aspects (one for PNUT, one for the global platform). The judge firmly rejected this strategy.

On June 8, the unification ruling arrived. The judge appointed Michael Okafor, who had lost $242,000 on Pump.fun, as the lead plaintiff of the consolidated case. From that moment, disjointed investors gained a united front and a single voice.

The tactical surprise: when Solana and Jito become defendants

A month after the unification, the plaintiffs dropped a legal bombshell. On July 23, 2025, they filed a “Consolidated Amended Complaint” that radically expanded the scope of the accusation. No longer just Pump.fun, but also Solana Labs, the Solana Foundation, and Jito Labs, along with all their executives.

The accusation was revolutionary: the three actors did not operate independently but formed an interconnected community of interests. Solana provided the blockchain infrastructure, Jito offered MEV tools that allowed the privileged to pay extra fees to prioritize their transactions (frontrunning), and Pump.fun managed the platform. Together, they built the illusion of decentralization while orchestrating the betrayal of retail investors.

A month later, on August 21, the “RICO Case Statement” was filed: the formal charge of racketeering conspiracy.

The accusations: a sophisticated fraudulent machine

Reading court documents reveals that this is not just a battle of angry investors. The charges articulate five pillars:

First: Selling unregistered securities. According to the Howey Test (the standard of the U.S. Supreme Court in 1946), meme tokens on Pump.fun meet the legal definition of securities. None of them have been registered with the SEC. The platform sold these tokens via the “bonding curve” mechanism without providing information on risks, finances, or project background—information required for registered securities.

Second: Operating an illegal casino. Buying tokens with SOL is essentially a gamble whose outcome depends on market speculation, not real utility. Pump.fun, like a casino, retains 1% on each transaction.

Third: Telemetric fraud and deceptive advertising. Promises of “Fair Launch,” “No Presale,” “Rug-proof” are false. Pump.fun secretly integrated Jito’s MEV technology, allowing insiders to buy before regular users.

Fourth: Money laundering. Plaintiffs accuse Pump.fun of receiving and transferring funds without a license, even facilitating North Korean hacker group Lazarus Group’s money laundering through tokens like “QinShihuang.”

Fifth: Total lack of investor protection. No KYC, no AML, no age verification.

The turning point: the informant and 15,000 chats

After September 2025, everything changed. A “confidential informant” provided the plaintiffs with the first batch of evidence: about 5,000 messages from Pump.fun, Solana Labs, and Jito Labs internal channels, documenting technical coordination among the three parties.

A month later, on October 21, the same informant delivered a second batch: over 10,000 chats and related documents, described as revealing “a well-designed fraud network.” These materials detail technical integration, discussions on how to “optimize” trading processes (euphemism for manipulation), and how insiders exploited informational advantages.

The court approved on December 9 the request for a “Second Amended Complaint” to incorporate this evidence. On December 10, the plaintiffs requested an extension for the filing deadline. On December 11, Judge McMahon granted the request. The new deadline: January 7, 2026.

The current state and open questions

As 2026 approaches, the ecosystem remains in suspense. Alon Cohen has not made public statements for over a month. Solana and Jito executives maintain strategic silence. Surprisingly, the market seems unconcerned: Solana’s price has remained stable, and PUMP’s decline reflects more the collapse of the meme narrative than the direct effect of the lawsuit.

But when the “Second Amended Complaint” containing the full analysis of the 15,000 chats arrives on January 7, the crucial questions will finally emerge: Who is the informant? A former employee? A competitor? Or a regulatory agent? What do these communications really reveal? Are they proof of true conspiracy or just decontextualized corporate emails?

This case, which started as an investor complaint for losing $231 in Pump.fun’s online coin launch, has transformed into the largest legal battle in the contemporary crypto ecosystem, touching the core of the industry’s defining question: is decentralization real, or just a well-crafted illusion?