Pump.fun Lawsuit Annual Review: The Puzzle of Truth Behind 15,000 Chat Logs

Original author: June, Deep Tide TechFlow

In January 2025, the Meme coin market was at the peak of its frenzy. With US President Trump's announcement of Trump coin, an unprecedented speculative frenzy swept in, and the get-rich-quick myth of the "100x coin" devoured the market's attention.

At the same time, a lawsuit against the Pump.fun platform was also quietly launched.

Fast forward to recent days.

Alon Cohen, co-founder and COO of Pump.fun, has been silent on social media for over a month. This silence is particularly striking given Alon's usual activity and constant online activity. Data shows that Pump.fun's weekly trading volume has plummeted from a peak of $3.3 billion in January to the current $481 million, a drop of over 80%. Meanwhile, the price of PUMP has fallen to $0.0019, a pullback of approximately 78% from its all-time high.

Going back a few months to July 12th, the situation was completely different. Pump.fun's public sale was issued at a uniform price of $0.004 per token and sold out in 12 minutes, raising approximately $600 million, pushing emotions to a fever pitch.

The market's attitude has shifted dramatically from its initial bustling activity at the beginning of the year to its current sluggishness.

Amidst all these changes, the only thing that hasn't stopped is the buyback program. The Pump.fun team continues to execute its daily buyback plan as scheduled. To date, the cumulative buyback amount has reached $216 million, absorbing approximately 15.16% of the circulating supply.

Meanwhile, the lawsuit that was overlooked amidst the market frenzy is now quietly escalating.

It all started with the losses at $PNUT.

The story begins in January 2025.

On January 16, investor Kendall Carnahan filed a lawsuit in the Southern District of New York (Case No.: Carnahan v. Baton Corp.), targeting Pump.fun and its three founders. Carnahan's claim is clear: he suffered losses after purchasing $PNUT tokens on the platform and alleges that Pump.fun sold unregistered securities, violating the U.S. Securities Act of 1933.

According to the lawsuit documents, the investor's actual loss was only $231.

Just two weeks later, on January 30th, another investor, Diego Aguilar, filed a similar lawsuit (Case No.: Aguilar v. Baton Corp.). Unlike Carnahan, Aguilar purchased a wider variety of tokens, including several Meme tokens issued on the Pump.fun platform, such as $FRED, $FWOG, and $GRIFFAIN. His lawsuit had a broader scope, representing all investors who purchased unregistered tokens on the platform.

At this point, the two cases were being handled independently, and the defendants were the same group of people:

Pump.fun is operated by Baton Corporation Ltd and its three founders, Alon Cohen (Chief Operating Officer), Dylan Kerler (Chief Technology Officer), and Noah Bernhard Hugo Tweedale (Chief Executive Officer).

The two cases were merged, and the plaintiff who lost $240,000 became the lead plaintiff.

The two separate lawsuits quickly attracted the court's attention. Judge Colleen McMahon of the Southern District of New York, who was presiding over the case, noticed a problem: the two cases targeted the same group of defendants, the same platform, and the same illegal activities, so why were they being tried separately?

On June 18, 2025, Judge McMahon directly questioned the plaintiff's legal team:

Why are there two separate lawsuits concerning the same issue? She asked the lawyers to explain why the two cases should not have been merged.

The plaintiffs' lawyers initially attempted to argue that two separate cases could be maintained, one specifically against the $PNUT token and the other against all tokens on the Pump.fun platform, and suggested appointing two lead plaintiffs for each.

But the judge clearly wasn't buying it. This "divide and conquer" strategy not only wastes judicial resources but can also lead to contradictory judgments in different cases. The key point is that all the plaintiffs face the same core issue: they all accuse Pump.fun of selling unregistered securities and believe they are victims of the same fraudulent system.

On June 26, Judge McMahon ruled to formally merge the two cases . Simultaneously, pursuant to the Private Securities Litigation Reform Act (PSLRA), the judge formally appointed Michael Okafor, who suffered the greatest loss, as the lead plaintiff (according to court records, Okafor lost approximately $242,000 in the Pump.fun transaction, far exceeding the losses of the other plaintiffs).

At this point, the investors, who had previously been fighting their own battles, formed a united front.

The focus shifts to Solana Labs and Jito

Just one month after the cases were merged, the plaintiff dropped a bombshell.

On July 23, 2025, the plaintiff filed a Consolidated Amended Complaint , dramatically expanding the list of defendants. This time, the attack was no longer solely directed at Pump.fun and its three founders, but directly targeted key participants in the entire Solana ecosystem.

The newly added defendants include:

• Solana Labs, the Solana Foundation, and its executives (the defendants in the Solana case): The plaintiff alleges that Solana is more than just a provider of blockchain technology. According to the lawsuit, Pump.fun and Solana Labs had close technical coordination and communication that went far beyond a typical developer-platform relationship.
• Jito Labs and its executives (Jito, the defendant): The plaintiff argues that Jito's MEV technology allows insiders to pay extra to ensure their trades are executed first, thereby buying tokens before ordinary users and achieving risk-free arbitrage.

The plaintiffs' strategy was clear: they attempted to prove that Pump.fun, Solana, and Jito did not operate independently, but rather formed a tightly knit community of interests. Solana provided the blockchain infrastructure, Jito provided the MEV tools, and Pump.fun operated the platform; together, they constructed a seemingly decentralized but actually manipulated system.

The core accusation is not as simple as "losing money".

Many might assume this is simply a group of investors angrily protesting losses they've incurred in cryptocurrency trading. However, a closer look at the hundreds of pages of court documents reveals that the plaintiffs' allegations point to an elaborate fraud scheme.

First charge: Sale of unregistered securities

This is the legal basis for the entire case.

The plaintiff argues that all Meme tokens issued on the Pump.fun platform are essentially investment contracts and, according to the Howe Test, meet the definition of securities. However, the defendant publicly sold these tokens to the public without filing any registration statement with the U.S. Securities and Exchange Commission, violating Sections 5, 12(a)(1), and 15 of the Securities Act of 1933.

When the platform sold tokens through the "bonding curve" mechanism, it failed to disclose to investors any necessary risk information, financial status, or project background, all of which are information that must be provided when registering a securities offering.

Note: The Howey Test is a legal standard established by the U.S. Supreme Court in 1946, SEC v. WJ Howey Co., to determine whether a particular transaction or plan constitutes an "investment contract ." If it meets the test standard, the asset is considered a "securities" and must be regulated by the U.S. Securities and Exchange Commission (SEC) and comply with the registration and disclosure requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Second charge: Operating an illegal gambling business

The plaintiffs define Pump.fun as a "Meme Coin Casino." They argue that users' act of investing SOL to purchase tokens is essentially "betting," the outcome of which depends primarily on luck and market speculation, rather than the actual utility of the tokens. The platform, acting as the "house," takes a 1% commission from each transaction, much like a casino taking a cut.

Third charge: Telecommunications fraud and false advertising

Pump.fun outwardly advertises "Fair Launch," "No Presale," and "Rug-proof," giving the impression that all participants are on a level playing field. However, this is actually a complete lie.

The lawsuit documents allege that Pump.fun secretly integrated MEV technology provided by Jito Labs. This means that insiders with "insider" knowledge and a willingness to pay extra "tips" could use "Jito bundles" to buy tokens before regular users' trades were executed, and then immediately sell them for profit after the price rose—a practice known as front-running.

Fourth charge: Money laundering and unlicensed money transfers

The plaintiffs accuse Pump.fun of receiving and transferring large sums of money without obtaining any remittance licenses. The lawsuit alleges that the platform even assisted the North Korean hacking group Lazarus Group in laundering illicit funds. Specifically, the hackers issued a meme token called "QinShihuang" on Pump.fun, leveraging the platform's high traffic and liquidity to mix "dirty money" with legitimate transaction funds from ordinary retail investors.

Fifth allegation: Complete lack of investor protection

Unlike traditional financial platforms, Pump.fun has no Know Your Customer (KYC) process, no Anti-Money Laundering (AML) protocol, and not even the most basic age verification.

The plaintiff's core argument can be summarized in one sentence: This is not a normal investment affected by market fluctuations, but a fraudulent system designed from the outset to cause losses for retail investors and profits for insiders.

This expansion signifies a fundamental shift in the nature of the lawsuit. The plaintiffs are no longer content with accusing Pump.fun of acting alone, but rather describe it as part of a much larger "criminal network."

On August 21, a month later, the plaintiff submitted a further "RICO Case Statement," formally accusing all the defendants of forming an "extortion group" and actually operating a manipulated "Meme Coin Casino" through Pump.fun, which was ostensibly a "fair start platform."

The plaintiff's logic is clear: Pump.fun did not operate independently; it was backed by Solana, which provided the blockchain infrastructure, and Jito, which provided the MEV technology tools. These three parties formed a close-knit community of interest, jointly defrauding ordinary investors.

But what evidence did the plaintiff have to support these allegations? The answer was revealed several months later.

Key evidence, mysterious informant and chat logs

After September 2025, the nature of the case underwent a fundamental change.

Because the plaintiff obtained solid evidence.

A confidential informant provided the plaintiff's legal team with the first batch of internal chat logs, totaling approximately 5,000 messages. These chat logs, allegedly originating from internal communication channels within Pump.fun, Solana Labs, and Jito Labs, documented technical coordination and business dealings between the three parties.

The emergence of this evidence was a godsend for the plaintiffs. All previous allegations—regarding technical collusion, MEV manipulation, and insider trading—had remained speculative and lacked direct evidence.

These internal chat logs are alleged to prove a “conspiracy” between the three parties.

On October 21st, a month later, the mysterious informant provided a second batch of documents, this time in even greater quantities, exceeding 10,000 chat logs and related documents. These materials reportedly detailed:

• How Pump.fun integrates with Solana Labs' coordination technology
• How are Jito's MEV tools embedded in Pump.fun's trading system?
• How the three parties discussed how to "optimize" the transaction process (the plaintiff argues this is a euphemism for market manipulation)
• How insiders can leverage their information advantage to conduct transactions

The plaintiff's lawyer stated in court documents that the chat logs "revealed an elaborate fraud network" and proved that the relationship between Pump.fun, Solana, and Jito was far more than just a superficial "technical partnership."

Application for a second amendment to the complaint

Faced with such a large amount of new evidence, the plaintiff needed time to organize and analyze it. On December 9, 2025, the court granted the plaintiff's request to file a Second Amended Complaint, allowing them to include this new evidence in the litigation.

However, a problem arose: reviewing, filtering, translating (some of which may be non-English), and analyzing the legal implications of over 15,000 chat logs was an enormous workload. Coupled with the upcoming Christmas and New Year holidays, the plaintiff's legal team clearly didn't have enough time.

On December 10, the plaintiff filed a motion with the court requesting an extension of the deadline for filing the Second Amended Complaint.

Just one day later, on December 11, Judge McMahon granted the extension request. The new deadline was set for January 7, 2026. This means that after the New Year, a Second Amended Complaint, potentially containing even more explosive allegations, will be presented in court.

Current status of the case

The lawsuit has been going on for almost a year now, but the real battle has only just begun.

On January 7, 2026, the plaintiff will file a second amended complaint containing all the new evidence, at which point we will see what those 15,000 chat logs reveal. Meanwhile, the defendants have remained unusually quiet. Pump.fun co-founder Alon Cohen has not spoken on social media for over a month, and executives at Solana and Jito have not made any public response to the lawsuit.

Interestingly, despite the growing scale and impact of the lawsuit, the cryptocurrency market seems unfazed. Solana's price hasn't fluctuated dramatically due to the lawsuit, and while the $PUMP token has continued to decline, this is more due to the collapse of the overall Meme coin narrative than the lawsuit itself.

end

This lawsuit, which stemmed from losses incurred trading Meme coins, has evolved into a class-action lawsuit targeting the entire Solana ecosystem.

The case has transcended the realm of "a few investors seeking redress after losing money." It touches upon the most fundamental questions facing the cryptocurrency industry: Is decentralization genuine, or merely a carefully crafted illusion? Is a fair launch truly fair?

However, many key issues remain unresolved:

• Who exactly is this mysterious informant? Is he a former employee? A competitor? Or an undercover agent from a regulatory agency?
• What exactly is contained in these 15,000 chat logs? Is it solid evidence of conspiracy, or just normal business communication taken out of context?
• How will the defendant defend themselves?

In 2026, with the submission of the Second Amended Complaint and the progress of the case hearing, we may get some answers.