The largest legal challenge ever brought against a decentralized finance platform is entering its most consequential phase. In the U.S. District Court for the Southern District of New York, a consolidated class action lawsuit alleges that Pump.fun — the Solana-based memecoin launchpad that genera...
"The Pump Enterprise collectively operated as a single, integrated scheme designed to funnel retail capital into a system where the house always wins." — Second Amended Complaint, Aguilar v. Baton Corporation Ltd. d/b/a Pump.Fun et al., No. 1:25-cv-00880 (S.D.N.Y.)
The largest legal challenge ever brought against a decentralized finance platform is entering its most consequential phase. In the U.S. District Court for the Southern District of New York, a consolidated class action lawsuit alleges that Pump.fun — the Solana-based memecoin launchpad that generated over $834 million in cumulative revenue — operated as the centerpiece of a RICO enterprise alongside Solana Labs, the Solana Foundation, and MEV infrastructure provider Jito Labs. The plaintiffs claim this network systematically extracted between $4 billion and $5.5 billion from retail participants through architecturally embedded advantages that made fair trading structurally impossible.
The case reached a critical inflection in December 2025 when Judge Colleen McMahon granted plaintiffs permission to file a second amended complaint incorporating over 5,000 internal chat logs obtained from a confidential informant. These communications allegedly document direct coordination between Solana Labs engineers and Pump.fun employees, transforming what began as a consumer fraud case into a potential racketeering prosecution. With defendants' motions to dismiss filed on January 23, 2026, and plaintiffs' oppositions submitted on February 13, the court is now weighing whether the allegations survive the pleading stage — a decision that could establish binding precedent for how U.S. courts treat the relationship between blockchain infrastructure providers and the applications built on top of them.
The economic value question at the heart of this case is straightforward: in a system where Pump.fun collected approximately 1% of every trade, Jito validators extracted MEV through priority transaction ordering, and 99% of launched tokens failed within 60 days, who captured the value, who bore the losses, and was the architecture itself designed to produce this outcome?
Pump.fun launched in early 2024 and rapidly became the dominant memecoin creation platform on Solana, controlling approximately 73–80% of all Solana memecoin launches by the end of 2025[^1]. The platform's mechanics were elegantly simple: anyone could create a token in minutes with no code, no audit, and minimal capital. Tokens launched on a bonding curve that automatically managed liquidity — early buyers got cheaper prices, and as demand increased, the price rose algorithmically until the token "graduated" to a decentralized exchange like Raydium.
The numbers are staggering. Over 6 million meme coins were launched on the platform through 2025, with 40,000 to 50,000 new tokens created daily at peak activity[^2]. Platform revenue exceeded $834 million in cumulative fees, with a single-day record of $15.5 million on January 24, 2025[^3]. The platform's dynamic fee model, ranging from 0.05% to 0.95% based on market capitalization, captured value from every transaction regardless of whether the token succeeded or failed.
But the headline revenue figures obscure a darker pattern. According to industry analysis, 99% of tokens launched on Pump.fun failed to survive beyond 60 days[^4]. Memecoins collectively lost roughly two-thirds of their aggregate market capitalization over the course of 2025, falling from $93.09 billion to approximately $36.51 billion[^5]. Analysts estimate that 95% of newly launched tokens may have been scams or near-certain failures from inception. The fundamental economic question is whether Pump.fun's architecture was designed with knowledge that this outcome was structurally inevitable — and whether its operators profited from the predictability of failure.
The lawsuit's most technically sophisticated allegation concerns the role of Maximal Extractable Value (MEV) in amplifying losses for retail participants. MEV refers to the profit that can be extracted by manipulating the order in which transactions are processed on a blockchain. On Solana, this primarily manifests through sandwich attacks — where a bot detects a pending trade, places a buy order before it and a sell order after it, profiting from the price movement the original trade creates.
The scale of MEV extraction on Solana is well documented. Academic research published at the 2025 ACM Internet Measurement Conference quantified over 500,000 sandwich attack instances resulting in $7.7 million in direct losses during the study period alone[^6]. Over a 16-month window from January 2024 through May 2025, sandwich bots extracted between $370 million and $500 million from Solana users, with monthly extraction ranging from 30,000 to 87,000 SOL[^7].
At the infrastructure level, Jito Labs occupies an extraordinary position. By early 2026, over 95% of Solana's active stake was delegated to validators running the Jito-Solana client, making it the de facto standard for block production on the network[^8]. Jito's Block Engine — an off-chain system that allows users to bid for priority transaction inclusion — generated an estimated $30 million in combined annual revenue from its Block Engine, Block Auction Marketplace (BAM), and staking operations[^9].
The plaintiffs allege that this infrastructure was not merely neutral plumbing. They contend that Jito's transaction ordering system created a two-tiered market: sophisticated actors who paid for priority execution could systematically front-run and sandwich retail traders who used the platform at face value. When combined with Pump.fun's bonding curve mechanics — where early entry and exit timing was the primary determinant of profit or loss — the result was allegedly a system where informed participants extracted value from uninformed ones with mathematical predictability.
Jito took some corrective action in 2024, shutting down its public mempool in March of that year. It subsequently banned 15 validators for evidence of sandwich attacks[^10]. But plaintiffs argue these measures were cosmetic, pointing to the continued prevalence of private mempools and alternative MEV extraction channels that persisted after the public mempool closure.
The legal architecture of the case escalated dramatically with the second amended complaint filed in December 2025. What began as consumer protection claims under New York General Business Law has expanded into a full RICO prosecution theory — the Racketeer Influenced and Corrupt Organizations Act, the same federal statute originally designed to combat organized crime[^11].
Under the plaintiffs' theory, Pump.fun, Solana Labs, the Solana Foundation, and Jito Labs collectively formed what the complaint terms the "Pump Enterprise." This alleged association engaged in systematic wire fraud, securities fraud, and unlicensed money transmission[^12]. The RICO framework is significant because it allows plaintiffs to pursue treble damages — tripling any proven losses — and to hold each participant liable for the acts of the entire enterprise.
The defendants named in the expanded complaint include not only the corporate entities but also individual executives. Solana co-founders Anatoly Yakovenko and Raj Gokal, Jito Labs co-founders Lucas Bruder and Jito Network co-founder Zano Sherwani, and Pump.fun's operators (operating under the corporate entity Baton Corporation Ltd.) are all named as participants in the alleged enterprise[^13].
If the court permits the RICO claims to proceed past the motion to dismiss stage, it would mark the first time a major blockchain infrastructure provider has faced racketeering charges for the actions of applications built on its network. The precedent would effectively test whether building and maintaining the validator infrastructure, client software, and MEV tools that enable a platform like Pump.fun constitutes sufficient participation in an enterprise to trigger RICO liability.
The case's trajectory shifted fundamentally in September 2025 when a confidential informant resurfaced with approximately 5,000 internal chat messages. These communications, which were not available when the original complaint was filed in July 2025, allegedly document direct coordination between Solana Labs engineers and Pump.fun employees regarding platform architecture, transaction ordering, and revenue optimization[^14].
According to the plaintiffs' filings, the chat logs reveal that insiders bought tokens at low prices before public trading commenced on specific launches, triggering rapid price increases through the automated bonding curves and leaving retail buyers to absorb losses when insiders exited[^15]. The messages allegedly demonstrate awareness among platform operators that the system's economics were structurally extractive — that the fair-launch narrative promoted to retail users was contradicted by the actual mechanics of how value flowed through the system.
Judge McMahon's December 9 order granting permission to incorporate this evidence was itself noteworthy. The court determined that the new factual allegations were sufficiently material to justify amending the complaint, overcoming the defendants' objections that the case had already been adequately pleaded. An annual review by Bitget Research noted that the total cache of communications, including materials from earlier filings, exceeds 15,000 chat records — a documentary record unusual in its scope for a DeFi litigation[^16].
The plaintiffs' damage estimates range from $4 billion to $5.5 billion in aggregate retail losses[^17]. This figure is derived from the difference between total capital invested in Pump.fun-launched tokens and the value recovered by retail participants upon exit, accounting for the platform's fee extraction, MEV losses, and the terminal decline of failed tokens.
To contextualize this figure: Pump.fun processed over $150 billion in cumulative trading volume through 2025[^18]. If the plaintiffs' loss estimates are accurate, they imply that approximately 3–4% of total volume was permanently extracted from retail participants through a combination of platform fees, MEV extraction, and insider front-running — a figure that, while seemingly modest as a percentage, compounds devastatingly across millions of low-liquidity tokens where individual position sizes were small and exit windows were narrow.
The damage model is complicated by the nature of memecoin trading itself. Defendants will likely argue that participants understood the speculative nature of the activity and that losses are attributable to market forces rather than structural manipulation. The plaintiffs' counter-argument rests on the chat evidence: if insiders knew the system was architecturally tilted and actively promoted it as fair, the informed-consent defense weakens considerably.
The Aguilar v. Pump.fun case, regardless of its ultimate outcome, is forcing a reckoning on a question the DeFi industry has studiously avoided: where does neutral infrastructure end and complicit participation begin?
The traditional defense of blockchain infrastructure providers rests on the analogy to internet service providers or telecommunications companies — neutral conduits that are not responsible for the content transmitted over their networks. Section 230 of the Communications Decency Act provides broad immunity for internet platforms. But no analogous statutory protection exists for blockchain infrastructure providers, and the RICO framework does not require that every participant in an enterprise commit every predicate act — only that they participate in the conduct of the enterprise's affairs.
If the court accepts the RICO theory, it establishes a framework where blockchain foundations, validator infrastructure companies, and MEV tool providers can be held jointly liable for extractive applications that use their technology. The practical impact would be profound: infrastructure providers would need to implement governance mechanisms, monitoring systems, and potentially circuit breakers to avoid liability for downstream applications.
The case also intersects with the SEC's shifting enforcement posture. With crypto enforcement actions down 60% under the Atkins administration and the agency's budget for enforcement reduced by approximately 17% from FY 2024 levels[^19], private litigation may increasingly fill the regulatory vacuum. The RICO framework's treble damages provision creates financial incentives for plaintiffs' attorneys that no regulatory enforcement action can match — transforming class action litigation into a de facto regulatory mechanism for the DeFi sector.
The Pump.fun RICO case is the most consequential DeFi lawsuit ever filed. At $4–5.5 billion in alleged damages with treble damage potential under RICO, the case dwarfs every previous DeFi-related legal action and could establish binding precedent on infrastructure provider liability.
The whistleblower evidence transforms the legal theory. Over 5,000 internal chat messages allegedly documenting insider coordination between Solana Labs engineers and Pump.fun operators elevate the case from speculative consumer fraud claims to a document-driven racketeering prosecution.
MEV extraction is the structural accelerant. The combination of Pump.fun's bonding curve mechanics and Jito's transaction ordering infrastructure allegedly created a two-tiered market where sophisticated actors could extract value from retail participants with mathematical predictability. Over $370–500 million in sandwich attack profits across 16 months quantifies the scale of the extraction layer.
The 99% failure rate is the core economic fact. When 99% of tokens launched on a platform fail within 60 days and the platform generates $834 million in fees regardless of outcome, the question of whether the architecture was designed to produce this result becomes unavoidable.
Private litigation is filling the regulatory vacuum. With SEC enforcement capacity diminished by staffing cuts and a policy pivot away from enforcement-led regulation, RICO class actions may become the primary accountability mechanism for extractive DeFi platforms — offering treble damages that dwarf any SEC penalty.
The Aguilar v. Baton Corporation case is not merely a lawsuit about a memecoin platform. It is a test of whether the legal system can impose accountability on a vertically integrated extraction apparatus that spans from blockchain infrastructure to end-user interfaces. The outcome will determine whether the "neutral infrastructure" defense — the foundational legal assumption on which much of DeFi's permissionless architecture rests — can withstand judicial scrutiny when confronted with documentary evidence of coordination and insider advantage.
For the Solana ecosystem specifically, the stakes extend beyond financial liability. A ruling that permits the RICO claims to proceed would signal to every blockchain foundation, validator client developer, and MEV infrastructure provider that neutrality is not merely a technical property but a legal obligation — one that requires active governance, transparent monitoring, and genuine separation between infrastructure and application layers.
The motions to dismiss are now fully briefed. The court's decision, expected in the coming months, will be the most important legal ruling in DeFi's brief history. The industry should prepare accordingly.
[^1]: CoinDesk, "Most Influential: Pump.fun," December 2025. https://www.coindesk.com/coindesk-news/2025/12/10/most-influential-pump-fun [^2]: Storm Partners, "Meme Coin Mania on Pump.fun: An Economic and Legal Analysis," 2025. https://storm.partners/blog-post/meme-coin-mania-on-pump-fun-an-economic-and-legal-analysis [^3]: CoinMarketCap, "Pump.fun Sets Record With $15.5 Million in Fees Following Anniversary," January 2025. https://coinmarketcap.com/academy/article/pumpfun-sets-record-with-dollar155-million-in-fees-following-anniversary [^4]: CoinLaw, "Memecoin Statistics 2026: Profit Secrets Exposed," 2026. https://coinlaw.io/memecoin-statistics/ [^5]: BestBrokers, "The Heat Death of Memecoins: Tracking the Memecoin Hype & Rapid Cooldown of 2025," 2025. https://www.bestbrokers.com/crypto-brokers/the-heat-death-of-memecoins/ [^6]: ACM Internet Measurement Conference, "Quantifying the Threat of Sandwiching MEV on Jito: A Measurement of Solana's Leading Validator Client," 2025. https://dl.acm.org/doi/10.1145/3730567.3764493 [^7]: Solana Compass, "Solana MEV Exposed: Sandwich Attacks, Arbitrage, and Validator Behavior Analysis," 2025. https://solanacompass.com/learn/accelerate-25/scale-or-die-at-accelerate-2025-the-state-of-solana-mev [^8]: CoinMarketCap, "Latest Jito News — Future Outlook, Trends & Market Insights," February 2026. https://coinmarketcap.com/cmc-ai/jito/latest-updates/ [^9]: Tokenomics.com, "Jito Tokenomics: How JTO Captures MEV and Staking Revenue on Solana," 2025. https://tokenomics.com/articles/jito-tokenomics-how-jto-captures-mev-and-staking-revenue-on-solana [^10]: MEXC News, "Jito cracks down on Solana validators after on-chain report exposes MEV abuse," 2025. https://www.mexc.com/en-GB/news/138838 [^11]: Wolf Popper LLP, "Pump.fun Class Action Lawsuit Expands with Consolidated Amended Complaint Adding RICO Allegations and New Defendants," December 2025. https://www.wolfpopper.com/news/pumpfun-class-action-lawsuit-expands-with-consolidated-amended-complaint-adding-rico-allegations-and-new-defendants [^12]: Crypto Valley Journal, "Pump.fun and Solana: USD 5.5 Billion RICO Class Action Lawsuit Over Memecoin Platform," 2025. https://cryptovalleyjournal.com/focus/legal-and-compliance/pump-fun-and-solana-5-5-billion-usd-rico-class-action-lawsuit-over-memecoin-platform/ [^13]: DL News, "Solana, Pump.fun execs sued. Lawsuit claims 5,000 private messages prove 'insider-rigged casino,'" 2025. https://www.dlnews.com/articles/defi/solana-execs-sued-over-memecoin-trades/ [^14]: Yahoo Finance, "Whistleblower Drops 5,000+ Secret Chats in Pump.fun MEV Scandal — Lawsuit Intensifies," 2025. https://finance.yahoo.com/news/whistleblower-drops-5-000-secret-210125260.html [^15]: Yahoo Finance, "Pump.fun Lawsuit Alleges 5,000-Message Plot to Rig Solana Meme Coins," 2025. https://finance.yahoo.com/news/pump-fun-lawsuit-alleges-5-142622742.html [^16]: Bitget News, "Annual Review of the Pump.fun Lawsuit: Piecing Together the Truth Behind 15,000 Chat Records," 2026. https://www.bitget.com/news/detail/12560605120230 [^17]: Unchained Crypto, "MEV Lawsuit Against Pump.fun, Solana Heats Up," 2025. https://unchainedcrypto.com/mev-lawsuit-against-pump-fun-solana-heats-up/ [^18]: Pump.fun Wikipedia, "pump.fun," 2025. https://en.wikipedia.org/wiki/Pump.fun [^19]: Cornerstone Research, "SEC Cryptocurrency Enforcement Declined in First Year of Atkins Administration," 2026. https://www.cornerstone.com/insights/press-releases/sec-cryptocurrency-enforcement-declined-atkins-administration/