tl;dr
Solana Labs and Jito Labs have been named co-defendants in a federal lawsuit alleging their central role in a $1.5 billion fraud related to the Solana-based memecoin launchpad Pump.Fun. The amended complaint accuses them of actively participating in a fraudulent online gambling and money transmissio...
Solana Labs and Jito Labs have been named co-defendants in a recently amended federal lawsuit alleging their central involvement in a $1.5 billion fraud connected to the Solana-based memecoin launchpad Pump.Fun. The lawsuit, filed on July 22 by Burwick Law in the Southern District of New York, broadens an earlier case initially focused on Pump.Fun and its affiliates.
The amended complaint accuses both Solana Labs and Jito Labs of going beyond the role of infrastructure providers to become active participants in what is described as a fraudulent online gambling and money transmission scheme. The firms allegedly facilitated Pump.Fun’s operations, which involved rapid token launches and extracting fees from retail traders without regulatory compliance, investor protections, or identity verification processes.
A notable allegation highlights the North Korea-linked Lazarus Group using Pump.Fun’s infrastructure to launch a memecoin called “QinShihuang” to launder funds associated with the Bybit exchange hack. The coin saw a trading volume spike to $26 million shortly after its launch, enabling conversion of illicit proceeds into Solana’s native token, SOL.
Burwick also claims that Solana Labs and its Swiss-based foundation structured their efforts to avoid U.S. regulatory oversight while still profiting from U.S.-based trading volumes and market activities. Jito Labs is accused of providing validator and MEV tools that scaled the system’s operations and revenue generation from user interactions.
The lawsuit charges all named parties under the Racketeer Influenced and Corrupt Organizations (RICO) Act, asserting a coordinated enterprise designed to generate revenue through pseudonymous trading while circumventing consumer protection laws and fair financial practices. It also observes a sharp decline in Pump.Fun’s usage metrics, with competitor Bonk Fun surpassing it in market share and daily trading volumes.
While claims of unregistered securities are confined to Pump.Fun, the amended suit adds counts of fraud, deceptive marketing, and unjust enrichment against all co-defendants, alleging their active benefit from an ecosystem rooted in speculative hype and regulatory evasion.