Pump.fun Faces Escalating Legal Troubles as Third Crypto Lawsuit Alleges Fraud and Racketeering

Pump.fun Under Fire: Third Lawsuit Intensifies Scrutiny Over Meme Coin Launchpad

The Solana-powered meme coin launchpad Pump.fun is making headlines once again — but not for innovation. The platform and its founders now face their third class action lawsuit, shining a harsh light on alleged misconduct and fraud within the rapidly growing memecoin sector of the cryptocurrency ecosystem.

Class Action Lawsuit Claims Rigged Meme Coin Launches

The latest amended legal complaint, filed in the Southern District of New York, accuses Pump.fun, its founders, and several high-profile affiliates — including Solana Labs, Jito Labs, and the Solana Foundation — of orchestrating an elaborate racketeering scheme. According to plaintiffs, users were lured by glitzy marketing campaigns only to fall victim to a system where token launches were manipulated through automated bonding curves and trading bots.

Over 11 million tokens have reportedly been launched via Pump.fun since January 2024. Alarmingly, the lawsuit claims that more than 98% of these memecoins crashed within 24 hours, functioning more like digital scratch-off tickets than legitimate investments. The legal documents argue that the true purpose was to funnel transaction fees to insiders and the platform, not to generate long-term value for retail cryptocurrency traders.

Platform Accused of Creating a ‘Meme Coin Casino’

Pump.fun allegedly amassed over $722 million in fees from this activity. When considering revenues linked to affiliated firms like Solana Labs and Jito Labs, the total connected to the purported scheme exceeds $3.18 billion. Plaintiffs describe a so-called "Meme Coin Casino," wherein token launches resembled slot machine mechanics — with bots and insiders enjoying early, profit-generating access, while regular users bore the losses.

“Pump.fun designed the gambling mechanics to be structurally exploitable, and Jito Labs served the role of rigging the games,” reads the lawsuit. The filing details how this setup echoes a rigged slot machine, where early participants sell tokens for profit, leaving latecomers to absorb the asset's rapid collapse. There is no underlying utility or project, just a rapid cycle of buying, dumping, and token crash.

The complaint expands on similar legal actions filed earlier in the year, amplifying concerns about the platform’s business model and the risks faced by unwary crypto investors.

A Pattern of Alleged Fraud: Previous Lawsuits Revisited

Crypto.news previously reported that the same legal team launched two lawsuits against Pump.fun, each pointing to a pattern of misleading marketing, collaboration with influencers, and aggressive meme coin launches. Tokens like FWOG, Griffain, and Peanut the Squirrel all saw sharp rises upon launch, only to plummet shortly after—allegedly creating profits for a select few while most participants lost out.

The newest lawsuit not only echoes prior fraud charges but also introduces accusations of racketeering, wire fraud, and violations of gambling laws — signaling an escalation in the legal assault against the meme coin launchpad.

Regulatory Pressure Mounts — But Revenue Keeps Climbing

Despite intensifying legal scrutiny and controversy over insider trading accusations tied to its own native token, Pump.fun continues to see substantial platform revenue. According to Dune Analytics data as of July 24, the platform has generated more than $630 million in total earnings — highlighting the enduring popularity of meme coins and the high-risk culture pervading the Solana blockchain space.

As the lawsuits evolve and regulatory attention sharpens, the Pump.fun saga serves as a cautionary tale for the broader crypto community. Industry observers are keeping a close watch as the outcomes could set major precedents for the future of token launchpads, decentralized gambling, and investor protections in the blockchain world.