Major Crypto Lawsuit Targets Solana, Pump.Fun, Jito Over RICO and Financial Crime Allegations

A significant legal challenge has intensified within the cryptocurrency market, with a lawsuit initially targeting the memecoin platform Pump.Fun now broadening its scope to include major entities like Solana Labs, the Solana Foundation, and Jito, along with their key executives. This development signals a heightened regulatory and legal scrutiny on the infrastructure supporting decentralized finance (DeFi) and memecoin ecosystems, particularly concerning compliance with established financial regulations.

• The lawsuit, initially against memecoin platform Pump.Fun, has expanded to include Solana Labs, the Solana Foundation, and Jito, along with their key executives.
• Filed by Wolf Popper and Burwick Law, the amended complaint names co-founders and executives from Solana, Jito, and Pump.Fun as defendants.
• Core allegations involve violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, predicated on illegal gambling, wire fraud, intellectual property theft, and unlicensed money transmission, alongside securities claims and breaches of New York General Business Law.
• Pump.Fun is accused of lacking user identity verification, failing to monitor suspicious transactions, and promoting tokens that exploit hate speech, violence, and trademarks.
• Solana Labs and Jito Labs are implicated as “knowing, intentional participants,” “architects, beneficiaries, and co-conspirators” in the alleged misconduct.
• The complaint characterizes Pump.Fun as an “illegal gambling enterprise” that generated over $722 million, highlighting intensified regulatory focus on DeFi compliance.

Legal Allegations and Regulatory Implications

At the core of the amended complaint are serious allegations under the Racketeer Influenced and Corrupt Organizations (RICO) Act. These claims encompass illegal gambling, wire fraud, intellectual property theft, and unlicensed money transmission. The lawsuit also includes securities claims and alleged breaches of New York General Business Law sections 349 and 350. Burwick Law stated in an X post, “The claims against defendants in this matter include RICO claims (predicated on illegal gambling, wire fraud, intellectual property theft, and unlicensed money transmission), Securities claims, and NY GBL 349 & 350 claims.”

Pump.Fun is accused of knowingly fostering an environment conducive to financial crimes. Plaintiffs allege the platform deliberately neglected user identity verification, failed to monitor or report suspicious transactions, and lacked a formal Anti-Money Laundering (AML) program. This alleged non-compliance purportedly facilitated illicit activities, including money laundering and terrorist financing. An example cited involves North Korea’s Lazarus Group allegedly laundering funds from a $1.5 billion Bybit hack via a memecoin launched on the platform. Furthermore, Pump.Fun is accused of intentionally promoting tokens that exploit hate speech, violence, and exploitation to generate attention and trading volume, and of violating trademarks.

The lawsuit directly implicates Solana Labs and Jito Labs, asserting they were “knowing, intentional participants” in the alleged misconduct, describing them as “architects, beneficiaries, and co-conspirators” of the purported fraud. It further alleges that Jito Labs actively “monitored the spins and intercepted profitable transactions, and sent them to whoever bribed them the most.” The complaint characterizes Pump.Fun’s operations as a “digital casino operated illegally” and an “illegal gambling enterprise” that generated over $722 million via its bonding curve mechanism.

This legal action underscores a critical shift in how regulators and legal bodies view decentralized platforms and the responsibilities of underlying blockchain infrastructure providers. The allegations suggest that platforms facilitating memecoin creation, particularly those generating substantial revenue, face increasing scrutiny over their compliance with established financial crime laws, including Section 311 of the Bank Secrecy Act, the USA Patriot Act, FinCEN rules, state money transmitter licensing rules, and OFAC sanctions. The case highlights the ongoing tension between decentralized innovation and traditional financial regulatory frameworks, pushing for greater accountability from key ecosystem participants.