Pump.fun Faces Legal Firestorm: Third Fraud Lawsuit Threatens to Sink Crypto Darling
Another day, another crypto scandal—this time with a side of lawsuits. Pump.fun, the meme coin launchpad that rode the DeFi wave to notoriety, now stares down its third fraud allegation in court. Here’s why the walls might be closing in.
Allegations Stack Up Like Unstable Stablecoins
Plaintiffs claim Pump.fun’s ‘too-good-to-be-true’ yields masked a classic rug-pull setup. Sound familiar? It should—this playbook writes itself in crypto’s wild west. The platform’s tokenomics, once hailed as ‘innovative,’ now face scrutiny for allegedly favoring insiders.
Regulators Circle Like Vultures
With three active lawsuits, watchdogs sharpen their claws. The SEC hasn’t weighed in yet—but when has that stopped them from crashing a crypto party? Legal experts whisper this could become a test case for DeFi accountability.
Market Reaction: A Shrug and a Meme
Pump.fun’s token dipped 8% on the news before meme traders bought the ‘discount.’ Because nothing says ‘sound investment’ like doubling down on controversy. Meanwhile, VC backers quietly update their LinkedIn profiles.
The Bottom Line
Crypto’s favorite game of ‘lawsuit or feature?’ continues. Whether Pump.fun survives may depend on how much irony the market can stomach—and how many lawyers accept payment in shitcoins.
Pump.fun’s ‘memecoin casino pumped and dumped:’ Lawsuit
Plaintiffs point to over 11 million tokens launched via Pump.fun between January 2024 and mid-2025. Of these, over 98% collapsed within 24 hours. The lawsuit argues that these tokens weren’t investments, but digital scratch tickets designed to generate transaction fees, not long-term value.
The platform reportedly earned more than $722 million in fees from the activity. When including Solana and Jito Labs, the total revenue tied to the alleged scheme surpasses $3.18 billion. Plaintiffs say all parties worked together to create what they call the “Meme Coin Casino,” where token launches mimicked slot machine mechanics and early access was reserved for bots and insiders.
“Pump.fun designed the gambling mechanics to be structurally exploitable, and Jito Labs served the role of rigging the games,” read the filing. The structure mimics a rigged slot machine where the first few players win by dumping their tokens on later ones. There is no underlying project, product, or revenue—only a fast-moving cycle of buying, dumping, and collapse.”
The latest amendments build on complaints filed earlier this year.
Older lawsuits, same story
As previously reported by crypto.news, two separate cases were already filed against Pump.fun by the same legal team, accusing the platform of the same pattern of fraud and misconduct.
At the time, the filings focused on tokens like FWOG, Griffain, and Peanut the Squirrel, which were all launched on the platform before collapsing shortly after. In both lawsuits, plaintiffs alleged that the memecoin launchpad collaborated with influencers and leaned heavily into meme marketing to drive speculative frenzy, while quietly extracting hundreds of millions in trading and launch fees.
The latest case builds on that narrative and adds new allegations, including racketeering, wire fraud, and gambling violations. This adds to the growing wave of scrutiny on Pump.fun, including concerns over its recent native token launch, insider dumps, and more.
Despite mounting legal pressure, the platform continues to rake in revenue. As of July 24, data from Dune Analytics shows Pump.fun has generated more than $630 million in total earnings.
