Investors Allege Large Financial Losses by Pump.fun in Legal Dispute
In a significant development, Pump.fun, a popular meme coin platform, is facing a $5.5 billion amended class-action lawsuit filed in the U.S. District Court for the Southern District of New York. The lawsuit, which was first initiated in late July 2025, accuses Pump.fun of operating as an unlicensed "meme coin casino" or "slot machine cabinet," deceptively extracting billions of dollars from retail investors through memecoin trading schemes.
The complaint, filed by Burwick Law on behalf of affected investors, alleges that Pump.fun and its operators, including Baton Corporation, pseudonymous developer Bernie, and founders Alon Cohen, Dylan Kerler, and Noah Bernhard Hugo Tweedale, have engaged in coordinated racketeering under the RICO Act, fraud, civil conspiracy, and unjust enrichment, among other charges.
The lawsuit asserts that Pump.fun generated over $722 million in revenue with systemic regulatory violations, such as the lack of age verification and Know Your Customer (KYC) procedures, allowing minors to trade on the platform. It also accuses the platform of transaction manipulation through Maximal Extractable Value (MEV) bundling by Jito Labs, with Solana Labs, the Solana Foundation, and Jito Labs profiting from fees and block space sales.
The platform's model, according to the lawsuit, involves a 1% transaction fee and revenue-sharing to token creators but lacks transparency and safeguards for investors. The complaint further suggests that the platform functions similarly to a rigged slot machine, where early participants profit by selling tokens to later investors, with no underlying project or sustainable revenue.
The lawsuit also alleges that Pump.fun's founders have collected hundreds of millions of dollars in fees over recent months while remaining anonymous. The total collected fees on Pump.fun are approaching 2.3 million (though the quote currency or exact figure is unclear).
Cryptocurrencies, which are often associated with promises of democratizing finance, transforming traditional systems, and empowering individuals, have found themselves at the centre of this controversy. The current crypto landscape, according to the lawsuit, is dominated by scams and speculative meme coins that primarily benefit small pools of insiders and corrupt corporations.
As the legal action against Pump.fun continues, these amended filings represent an escalation in legal claims against the platform and associated parties, focusing on alleged criminal enterprises and unlicensed casino-like operations in the crypto meme coin space. There is no public update indicating resolution or dismissal as of July 25, 2025.
Burwick Law has invited affected investors to join the lawsuit and share their grievances. The outcome of this lawsuit could have far-reaching implications for the crypto industry, potentially serving as a deterrent against similar alleged fraudulent activities in the future.
In light of the amended class-action lawsuit, there are concerns about the financial implications for Pump.fun and its associates, such as Baton Corporation, Bernie, Alon Cohen, Dylan Kerler, Noah Bernhard Hugo Tweedale, and potentially Jito Labs, Solana Labs, and the Solana Foundation, due to allegations of fraudulent investing activities and unjust enrichment. The lawsuit also raises questions about the transparency and regulatory compliance in the technology-driven cryptocurrency space, particularly with regards to meme coins.
