Inside the Pump.fun Lawsuit: 15,000 Messages, One Whistleblower, No Answers Yet

In January 2025, the meme coin market was at the peak of its frenzy. Following the launch of the TRUMP token by U.S. President Donald Trump, an unprecedented wave of speculation swept through the market. The myth of “100x gains” dominated investor attention and fueled a full-blown speculative mania.

At the same time, a lawsuit targeting the Pump.fun platform was quietly set in motion.

Fast forward to recent weeks.

Alon Cohen, co-founder and Chief Operating Officer of Pump.fun, has been absent from social media for over a month. For someone known to be highly active and constantly engaged online, this prolonged silence is particularly striking. Data shows that Pump.fun’s weekly trading volume has collapsed from its January peak of $3.3 billion to just $553 million today, representing a decline of more than 80%. Meanwhile, the price of PUMP has fallen to $0.0024, a drawdown of approximately 80% from its all-time high.

It All Began With Losses in $PNUT

The story traces back to January 2025.

On January 16, investor Kendall Carnahan filed a lawsuit in the United States District Court for the Southern District of New York (Case No.: Carnahan v. Baton Corp.), targeting Pump.fun and its three founders.

Carnahan’s claim was straightforward. After purchasing the $PNUT token on the platform, he incurred financial losses and alleged that Pump.fun had sold unregistered securities in violation of the U.S. Securities Act of 1933.

According to the court filings, the investor’s actual monetary loss amounted to just $231.

Just two weeks later, on January 30, another investor, Diego Aguilar, filed a similar lawsuit (Case No.: Aguilar v. Baton Corp.). Unlike Carnahan, Aguilar had purchased a wider range of tokens, including $FRED, $FWOG, $GRIFFAIN, and several other meme coins issued on the Pump.fun platform. His lawsuit was broader in scope, seeking to represent all investors who had purchased unregistered tokens on the platform.

At this stage, the two cases proceeded independently, but they shared the same defendants:

Baton Corporation Ltd, the operating company behind Pump.fun, and its three founders - Alon Cohen (COO), Dylan Kerler (CTO), and Noah Bernhard Hugo Tweedale (CEO).

The Cases Merge: An Investor with a $240,000 Loss Takes the Lead

The two independent lawsuits soon attracted judicial scrutiny. Judge Colleen McMahon of the U.S. District Court for the Southern District of New York, who was presiding over the matter, identified a fundamental redundancy: both cases targeted the same defendants, the same platform, and the same alleged unlawful conduct. Why, she reasoned, should they be litigated separately?

On June 18, 2025, Judge McMahon issued a direct challenge to the plaintiffs' legal teams. She demanded an explanation as to why these parallel actions existed at all and ordered the attorneys to show cause why the cases should not be consolidated.

The plaintiffs' lawyers initially attempted to defend the separation. They argued that the court could maintain two distinct tracks, where one focused specifically on the $PNUT token, and another covering the broader spectrum of tokens on the Pump.fun platform, and proposed appointing separate lead plaintiffs for each.

The judge was clearly unconvinced. Such a “divide-and-conquer” approach, in her view, would not only waste judicial resources but also risk producing inconsistent or even contradictory rulings. More importantly, the core issue faced by all plaintiffs was identical: each alleged that Pump.fun had sold unregistered securities and that they were victims of the same alleged fraudulent scheme.

On June 26, Colleen McMahon issued a ruling formally consolidating the two cases. At the same time, in accordance with the requirements of the Private Securities Litigation Reform Act (PSLRA), the court appointed Michael Okafor as lead plaintiff. Court records show that Okafor suffered losses of approximately $242,000 from trading on Pump.fun, far exceeding the losses claimed by any other plaintiff.

With that decision, what had once been fragmented and separate investor actions were unified into a single legal front.

Turning the Guns on Solana Labs and Jito

Just one month after the cases were consolidated, the plaintiffs introduced a major escalation.

On July 23, 2025, the plaintiffs filed a Consolidated Amended Complaint, dramatically expanding the list of defendants. This time, the allegations no longer targeted only Pump.fun and its three founders. Instead, the legal focus widened to include core participants across the broader Solana ecosystem.

The newly added defendants include:

• Solana Labs, Solana Foundation, and their executives (collectively, the “Solana Defendants”): The plaintiffs argue that Solana’s role went far beyond merely providing neutral blockchain infrastructure. According to the complaint, Pump.fun maintained close technical coordination and ongoing communications with Solana Labs, allegedly exceeding the scope of a standard developer–platform relationship.

• Jito Labs and its executives (the “Jito Defendants”): The plaintiffs allege that Jito’s MEV technology enabled insiders to pay additional fees to secure transaction priority, allowing them to purchase tokens ahead of ordinary users and extract what the complaint characterizes as near risk-free arbitrage profits.

The plaintiffs’ strategy is explicit. They seek to establish that Pump.fun, Solana, and Jito did not operate independently, but instead functioned as a tightly aligned economic collective. In this framing, Solana supplied the blockchain foundation, Jito provided MEV tooling, and Pump.fun operated the token issuance platform, together constructing a system that appeared decentralized on the surface, yet was allegedly coordinated and manipulated beneath it.

The Core Allegations Go Beyond “Losing Money”

Many people may assume this is simply a group of investors lashing out after losing money trading meme coins. But a close reading of the hundreds of pages of court filings suggests the plaintiffs are alleging something far more serious: a deliberately engineered fraud system.

Allegation 1: Sale of Unregistered Securities

This is the legal foundation of the entire case.

All meme tokens issued on Pump.fun are investment contracts under the Howey Test, making them securities. Yet defendants allegedly sold these tokens publicly without SEC registration, violating Sections 5, 12(a)(1), and 15 of the Securities Act of 1933.

When the platform sold tokens through its bonding curve mechanism, it provided no required disclosures with no risk factors, financial information, or project background. These disclosures are mandatory for registered securities offerings.

Notes: Howey Test is a legal standard from SEC v. W.J. Howey Co. (1946) that determines whether a transaction qualifies as an "investment contract." If it passes the test, the asset is a security and must comply with SEC regulations, including registration and disclosure requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Allegation 2: Operating an Illegal Gambling Enterprise

Plaintiffs call Pump.fun a "Meme Coin Casino." Their argument: users deposit SOL to buy tokens in what amounts to a wager. Outcomes depend on chance and speculation, not token utility. The platform acts as the house, taking a 1% fee on every transaction, which is the equivalent of a casino's rake.

Allegation 3: Wire Fraud and False Advertising

Pump.fun advertises "Fair Launch," "No Presale," and "Rug-proof” creating the impression that all participants compete on an equal footing. The plaintiffs allege that this portrayal is fundamentally misleading.

The plaintiffs claim that the platform integrated Jito Labs' MEV technology behind the scenes. This allowed insiders who paid extra "tips" to use "Jito bundles" for priority transaction placement. Result: insiders bought tokens before regular users, then sold into the resulting price spike, extracting profits through what the complaint describes as front-running.

Allegation 4: Money Laundering and Unlicensed Money Transmission

Plaintiffs claim Pump.fun moved large volumes of funds without required money transmission licenses, and facilitated money laundering for North Korea's Lazarus Group.

According to the filings, Lazarus-linked hackers launched a meme token called "QinShihuang" on the platform. They used Pump.fun's high traffic and liquidity to blend stolen funds with legitimate retail trades, laundering dirty money through ordinary user activity.

Allegation 5: Complete Lack of Investor Protection

Pump.fun allegedly operates without any Know Your Customer (KYC) procedures, anti-money laundering (AML) controls, or even basic age verification mechanisms.

Plaintiffs argue this wasn't a legitimate platform hit by market volatility. It was a system designed to extract losses from retail users while systematically enriching insiders.

This marked a fundamental shift. Plaintiffs were no longer targeting Pump.fun alone but reframed it as one node in a "criminal network."

One month later, on August 21, they filed a RICO Case Statement. The charge: all defendants formed a racketeering enterprise under the Racketeer Influenced and Corrupt Organizations Act. Pump.fun, marketed as a "fair launch platform," allegedly operated as a rigged "meme coin casino."

Pump.fun, they argue, did not operate in isolation. Behind it stood Solana, providing the underlying blockchain infrastructure, and Jito Labs, supplying MEV tooling. Together, the three allegedly formed a tightly aligned economic alliance that systematically defrauded retail investors.

The evidence? That wouldn't surface for months.

Key Evidence: A Mysterious Whistleblower and Internal Chat Logs

After September 2025, the case changed completely.

The plaintiffs obtained what they call hard evidence.

A confidential informant gave the legal team ~5,000 internal chat messages allegedly from Pump.fun, Solana Labs, and Jito Labs. The messages purportedly show technical coordination and business dealings between all three parties.

This was critical. Until now, allegations of collusion, MEV manipulation, and insider trading relied on inference. These communications, plaintiffs claim, provide direct proof of coordinated conduct.

One month later, on October 21, the informant delivered a second batch: over 10,000 messages and documents. According to plaintiffs, these show:

• How Pump.fun coordinated technical integrations with Solana Labs

• How Jito's MEV tools were embedded into Pump.fun's trading infrastructure

• How the three parties discussed "optimizing" transaction flows, which plaintiffs interpret as code for market manipulation

• How insiders allegedly used informational advantages to front-run ordinary users

Plaintiffs' attorneys called the chat records evidence of a "deliberately engineered fraud network," proof that the relationship went far beyond a standard technical partnership.

Motion for Leave to File a Second Amended Complaint

The evidence was overwhelming. Plaintiffs needed time to process it. On December 9, 2025, the court granted leave to file a Second Amended Complaint incorporating the new materials.

The challenge, however, was substantial. Over 15,000 chat messages required review, filtering, translation, and legal analysis. With Christmas and New Year approaching, the timeline was impossible.

On December 10, the plaintiffs requested an extension. Judge Colleen McMahon granted it the next day. The new deadline was set for January 7, 2026.

This extension signals that, shortly after the new year, the court may be presented with a Second Amended Complaint containing even more consequential and potentially explosive allegations.

Current Status of the Case

The lawsuit is nearly a year old, but the real confrontation is just starting.

On January 7, 2026, the plaintiffs will file the Second Amended Complaint with all new evidence. The court and the public will finally see what those 15,000+ chat messages contain.

Meanwhile, the defendants’ side has been notably quiet. Alon Cohen, co-founder of Pump.fun, has been absent from social media for over a month, while executives from Solana and Jito Labs have issued no public statements in response to the litigation.

The crypto market, for now, seems indifferent. Solana’s price has not experienced significant volatility as a result of the case. While the $PUMP token continues falling, this appears to be driven more by the broader collapse of the meme coin narrative than by any direct market reaction to the lawsuit itself.

Epilogue

What began as a lawsuit over losses from trading meme coins has evolved into a sweeping class action aimed at the Solana ecosystem itself.

This is no longer about "a few investors seeking compensation." The case strikes at fundamental questions facing crypto: Is decentralization real? Are "fair launches" actually fair?

Critical questions remain unanswered:

• Who is the confidential informant? A disgruntled employee? A competitor?

• What's in those 15,000+ messages? Clear evidence of conspiracy, or routine business chats twisted out of context?

• How will defendants respond? What's their legal strategy?

As 2026 unfolds, the Second Amended Complaint and courtroom proceedings may finally provide answers.

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