Pump.fun Lawsuit: Allegations, Defendants, and Case Status

The Pump.fun lawsuit is a consolidated federal class action, Aguilar v. Baton Corporation Ltd. d/b/a Pump.Fun et al. (No. 1:25-cv-00880), pending before Judge Colleen McMahon in the U.S. District Court for the Southern District of New York. It accuses the Solana-based memecoin platform, along with Solana Labs, the Solana Foundation, and their top executives, of operating an unregistered securities exchange, an illegal gambling business, and a racketeering enterprise that plaintiffs say extracted between $4 billion and $5.5 billion from retail crypto traders.¹

What the Lawsuit Alleges

The consolidated amended complaint describes the platform as a “coordinated racketeering enterprise” and an “illegal digital casino.” The claims fall into four buckets.

Unregistered Securities

The foundational theory is that every memecoin launched through Pump.fun is an unregistered security under the Securities Act of 1933. Plaintiffs argue that because the platform uses uniform smart contract templates and a programmatic bonding curve to price every token, all coins issued through it meet the Howey definition of an investment contract.² The complaint says Baton Corporation acted as a “statutory seller” in violation of Sections 5 and 12(a)(1), and that the three individual founders bear joint and several liability as control persons under Section 15.³

This theory faces a headwind. On February 27, 2025, the SEC’s Division of Corporation Finance issued a staff statement concluding that memecoins purchased primarily for entertainment and speculation, with little utility, generally do not qualify as securities, because buyers are not investing in a common enterprise and any profits come from speculative trading rather than the efforts of others. The statement carries “no legal force or effect,” is not binding on courts, does not cover tokens labeled as memecoins to evade securities laws, and does not shield fraudulent conduct from prosecution under other laws.⁴

RICO and Racketeering

The July 2025 amended complaint added claims under the Racketeer Influenced and Corrupt Organizations Act, alleging the defendants formed an “association-in-fact enterprise” engaged in wire fraud, securities fraud, and unlicensed money transmission. The complaint calls the platform a system “designed to simulate an illegal digital casino disguised as meme coin creation and trading.”⁵ RICO matters practically because a violation carries treble damages, meaning any award can be tripled.¹

Unlicensed Money Transmission

The complaint alleges Pump.fun operated as an unlicensed money transmitter under 18 U.S.C. § 1960, moving large sums without the required licenses and without any Know Your Customer, anti-money laundering, or age verification procedures.¹ To illustrate what those gaps enabled, plaintiffs point to a February 2025 incident in which the North Korean hacking group Lazarus Group allegedly launched a memecoin called “QinShihuang” on Pump.fun to launder proceeds from the Bybit exchange hack. On-chain investigator ZachXBT traced wallet activity showing the token generated over $26 million in trading volume within hours of launch, with funds linked to a $1.47 billion Bybit theft.⁶

Insider Front-Running

The most detailed allegations describe how insiders allegedly gamed the platform against ordinary buyers. Because Solana’s architecture lets users pay “tips” to jump the transaction queue, people with advance knowledge of upcoming token launches could allegedly buy up large portions of supply before anyone else and dump the tokens as retail demand arrived.⁷

The mechanism, according to the complaint, involves Jito bundles, a feature of the Jito validator client used by roughly 95% of Solana validators. Jito bundles let up to five transactions be packaged and executed atomically in a specific order within a single block, bypassing the public transaction pipeline. Plaintiffs allege token creators used these bundles to package a new coin’s creation together with their own purchases from multiple wallets, locking in the lowest possible price before anyone else could buy.⁸

Who Is Being Sued

The core defendant is Baton Corporation Ltd., a UK company that operates Pump.fun.⁹ Its three founders, all named as control persons, are CEO Noah Bernhard Hugo Tweedale, COO Alon Cohen, and CTO Dylan Kerler.³

The consolidated amended complaint filed on July 22, 2025 expanded the case significantly. Plaintiffs added Solana Labs, the Solana Foundation, Solana co-founders Anatoly Yakovenko (CEO) and Raj Gokal (COO), and Solana Foundation executives Dan Albert, Lily Liu, and Austin Federa as defendants.⁵

Jito Labs and the Jito Foundation, initially named alongside their executives Lucas Bruder and Brian Smith, are no longer in the case. In September 2025, Jito Labs moved to dismiss through the law firm Skadden, arguing that plaintiffs had failed to plead that Jito had “any relationship with, involvement in or control over the Pump.fun platform.” Rather than fight the motion, plaintiffs agreed to a voluntary dismissal with no settlement payment. The court entered the dismissal on September 30, 2025.¹⁰

The Leaked Messages and Second Amended Complaint

Late in 2025 the case took a significant turn. According to DL News, a confidential informant provided plaintiffs’ attorneys with two batches of internal chat logs between Pump.fun and Solana Labs engineers: roughly 5,000 messages in a first tranche, and over 10,000 additional records delivered in October 2025.¹¹

Plaintiffs say the messages show engineers from both companies discussing “the integration of key software components” in real time and reveal “manipulation of coin launches and other insider schemes.”¹² The complaint also incorporates statements from unnamed crypto influencers who allegedly described written agreements under which Pump.fun coordinated promotional content and took early positions in tokens to sell into retail demand.⁷

Among the messages cited are statements attributed to co-founder Alon Cohen, who allegedly acknowledged that “most investors ‘lose’ when they invest on his platform.” In another exchange he wrote: “We democratised trading lowcaps so much that everyone is exposed to the really, really low odds that come with gambling such low mcaps.” And on how users respond to those odds: “people will generally be happier (even though most lose); people will play the game they’re naturally suited to playing.”⁷

DL News noted that the lawsuit does not provide definitive evidence that Pump.fun executives personally profited from alleged front-running, and suggested some of the cited messages may have been “cherry-picked.” In December 2025, a federal judge granted Burwick Law permission to file a second amended complaint incorporating the new evidence, with a filing deadline of January 7, 2026.¹¹

What Plaintiffs Are Asking For

The relief goes well beyond damages. Plaintiffs are seeking:

Class certification on behalf of retail traders who lost money on Pump.fun tokens.
Compensatory and treble damages under RICO.
Rescission of all Pump.fun token transactions, effectively unwinding the trades.
A federal equity receiver to take control of the platform’s operations.
Permanent injunctions barring the defendants from operating similar platforms without gambling and money transmitter licenses and anti-money laundering procedures.
Disgorgement of “all ill-gotten gains,” including appreciation in the value of SOL tokens attributed to the alleged scheme.¹³⁵

Where the Case Stands

The case was consolidated on June 25, 2025, when Judge McMahon combined Carnahan v. Baton Corporation Ltd. (filed January 16, 2025) with the broader Aguilar action (filed January 30, 2025), finding that they “sought the same relief for the same alleged violations.” Michael Okafor was appointed lead plaintiff. Both suits were brought by Wolf Popper LLP and Burwick Law.⁵

As of mid-2026 the case is active but early. Multiple defense attorneys have entered appearances for Baton Corporation and the individual founders. The action is governed by the Private Securities Litigation Reform Act, which imposes procedural requirements before standard discovery can begin. Judge McMahon indicated she would set a schedule for motions to dismiss and class certification after consolidation, but the docket shows no dates for those motions as of its last entry in April 2026.¹⁴

Pump.fun has continued to operate and grow during the litigation. In July 2025 the platform raised approximately $600 million in a public token sale that sold out in 12 minutes, alongside about $720 million in private sales. The sale excluded participants from the United States and the United Kingdom, among other jurisdictions.¹⁵¹⁶

How Pump.fun Works

Pump.fun launched in January 2024 on the Solana blockchain. Anyone can create a tradeable memecoin by filling out a form with a name, ticker, logo, and description, with no coding required. Each new token starts with a fixed supply of one billion coins and trades on an automated bonding curve, where the price rises with each purchase and falls with each sale. When a token hits a market cap of roughly $50,000, it “graduates” from the bonding curve and moves to PumpSwap, the platform’s native decentralized exchange launched in March 2025.¹⁷

The platform charges a 1% fee on all buys and sells. Daily revenue passed $1 million in May 2024, hit $14.3 million on November 23, 2024, and reached an all-time high of $15.8 million on January 24, 2025. Weekly transaction volume regularly exceeds $1 billion. A report by blockchain analytics firm Solidus Labs found that approximately 98.6% of tokens on the platform collapse into what it classified as scams, frauds, or rug pulls.¹⁷

In December 2024, the UK’s Financial Conduct Authority added Pump.fun to its official warning list, identifying it as an “unauthorised firm” that “may be providing or promoting financial services or products” without permission and advising the public to “avoid dealing with this firm.” The platform has been geolocked in the UK since then.¹⁸

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