Pumpfun and Solana Face $5.5B RICO Lawsuit Alleging Coordinated Memecoin Scheme That Wiped Out Retail Investors

A consolidated class action lawsuit in the U.S. District Court for the Southern District of New York is seeking up to $5.5 billion in damages from Pump.fun, Solana Labs, the Solana Foundation, Jito Labs, and related executives, alleging a coordinated RICO (Racketeer Influenced and Corrupt Organizations Act) enterprise built around Solana-based memecoin launches. The case, proceeding under Aguilar v. Baton Corp. d/b/a Pump.Fun (No. 1:25-cv-00880-CM), claims that the defendants operated an “illegal digital casino” that systematically extracted billions from retail traders through allegedly rigged token launches on the Pump.fun platform. Originally filed in early 2025 by memecoin investors including Diego Aguilar, Kendall Carnahan, and Michael Okafor, the litigation began as a challenge to Pump.fun’s operation of what plaintiffs call an unregistered securities exchange for memecoins on Solana, with no KYC/AML controls and a fee-based business model tied to token issuance and trading volume. In June 2025, Judge Colleen McMahon ordered consolidation of two related cases (including the PNUT token case Carnahan v. Baton Corp.) into a single proceeding, and on July 22, 2025, plaintiffs filed a Consolidated Amended Complaint that dramatically expanded the scope: adding RICO claims, New York consumer protection counts, unjust enrichment, and new defendants from across the Solana ecosystem. Plaintiffs characterize the “Pump Enterprise” as a coordinated scheme where insiders allegedly used Solana’s validator framework and Jito’s priority-execution tools to front‑run memecoin launches on Pump.fun, buying large allocations before the public and selling into subsequent retail demand, while public-facing materials framed the launches as fair and open markets. The complaint asserts total retail losses in the $4–5.5 billion range and seeks class certification, compensatory and treble damages under RICO, rescission of all Pump.fun token transactions, appointment of a federal receiver, and injunctions that could force the platforms to obtain gambling and money-transmitter licenses and implement full compliance controls before continuing similar operations. The case is notable because it moves long-standing criticisms that memecoin markets operate like “rigged casinos” into a major federal RICO action naming a leading L1 (Solana), its foundation, and associated infrastructure providers as alleged participants in a unified racketeering enterprise. Subsequent developments include plaintiffs obtaining court approval to further expand their complaint after a confidential informant produced roughly 5,000 internal chat logs purportedly detailing coordination around transaction ordering and token launch mechanics, and a separate voluntary dismissal of claims against Jito Labs and its CEO without any settlement payment, underscoring that roles and liabilities of different ecosystem actors remain contested.

✨ AI-generated background, compiled from web sources — not editorial content.

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