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- The complaint, citing $4–$5.5 billion in user losses, includes RICO charges against the Solana-based Pump.fun platform, and names over a dozen defendants.
- After briefly rallying 16% post-ICO, PUMP has plunged over 50%, now trading below $0.0030.
On Wednesday, July 23, Burwick Law filed a lawsuit characterizing Pump.fun as a “front-facing slot machine cabinet” designed to rapidly create and promote tokens without any investor disclosures or safeguards. The PUMP price is already down by an additional 20% today, falling all the way to $0.0030, i.e., 20% down from its ICO price.
The complaint claims that platforms like Pump.fun automate this scheme using bonding-curve pricing, anonymous wallet access, and preferential trading for insiders and bots, effectively turning the system into unlicensed, zero-sum gambling that heavily disadvantages average users.
Although the complaint presents serious allegations, it has not yet been tested in court. Legal experts point out that in the U.S., anyone can file a lawsuit with broad claims, many of which may be dismissed early in the legal process.
The lawsuit targets more than a dozen defendants, including executives from all four named entities. It estimates user losses tied to meme coin activity on Pump.fun and affiliated platforms at between $4 billion and $5.5 billion, based on on-chain data and trading results.
Plaintiffs have brought charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act, accusing the defendants of operating an illegal gambling scheme and an unlicensed money transmission business. Additional allegations include wire fraud, false advertising, offering unregistered securities, and deceptive practices under New York consumer protection laws.
PUMP Token Fails Despite Platform Hype
Pump.fun has experienced rapid growth in recent months, hitting a $2 billion market cap earlier this month after facilitating a $600 million PUMP token launch. Its user-friendly interface and minimal entry requirements have made it a key driver of on-chain activity within the Solana ecosystem.
The PUMP price rallied 16% on debut during to $0.0064 from its ICO price of $0.004. However, since then it has crashed more than 50% correcting under $0.0030. This comes has early private sale investors offloaded their coins in big numbers over the past few weeks.
Private sale participant “PUMP Top Fund 2” missed out on a $6 million exit after mistakenly depositing 2 billion $PUMP tokens (then worth $12.79 million) into Binance eight days ago, despite the exchange not supporting spot trading for the token.
The tokens, worth approximately $6.93 million today, were likely returned 23 hours ago, after which the investor quickly moved them to Bybit. The timing error cost the investor a prime window to sell at peak value, potentially resulting in a loss of around $6 million.
Furthermore, Pump.fun project chief Alon Cohen said that the airdrop won’t be coming soon and that the team is working towards rewarding the community.
We’re actually focusing on bringing back a lot of that attention and hype to our ecosystem. That being said, the airdrop is not going to be taking place in the immediate future, but we will be, you know, we will communicate any timelines or any details, whatever those details are, are available,
