Burwick Law has now named Solana Labs and Jito Labs as defendants in its lawsuit against Pump Fun, accusing the pair of acting as “architects” and “coconspirators” in the memecoin platform’s fraudulent casino enterprise.
The new lawsuit was filed on Tuesday, a month after Judge Colleen McMahon ordered Burwick to merge two of its Pump Fun lawsuits into the wider-scope Diego Aguilar case.
All the usual Pump Fun defendants are listed, but now the Solana Labs/Foundation, Jito Labs/Foundation, along with various executives, including Jito CEO Lucas Bruder and Solana Labs CEO Anatoly Yakovenko, are included.
The amended suit accuses both crypto firms of knowingly facilitating Pump Fun’s “illegal gambling and money transmission” enterprise and claims the pair “are not bystanders to fraud,” but rather the “architects, beneficiaries, and coconspirators,” of fraud.
Read more: Pump Fun co-founder Dylan Kerler linked to 2017 ICO scams, report
The suit also details how Lazarus Group was able to utilize Pump Fun’s “complete absence” of compliance infrastructure and ID verification to launch the “QinShihuang” memecoin and allegedly launder funds from the $1.5 billion Bybit hack.
Within hours of the launch, Burwick says, a combination of retail traders and an influx of Lazarus-held Bybit funds pushed the coin’s trading volume to $26 million, allowing Lazarus Group to sell its holdings and convert them into SOL.
“It was materially facilitated by the technical tools and infrastructure provided by Solana Labs and Jito Labs, both of which had the capacity to intervene or restrict such activity and declined to do so,” Burwick claims.
Burwick Law is now accusing Pump Fun of fraud
Burwick previously avoided introducing fraud counts, but has now accused every named defendant of being part of an “association-in-fact” Pump Fun enterprise, involving wire fraud and operating an unlicensed money-transmitting business under the Racketeer Influenced and Corrupt Organizations Act.
It said, “This Pump Enterprise was formed and operated for the common purpose of deploying a pseudonymous online gambling system disguised as a decentralized token launch platform, monetizing that system through high-frequency speculative activity, and extracting maximum fee-based and validator-derived revenue from retail participants while evading financial regulation, intellectual property protections, and consumer safeguards.”
Each defendant is also accused of deceptively marketing the tokens as “fair launch” and free from manipulation while also being accused of unjust enrichment.
The same unregistered securities accusations are still levied solely against the Pump Fun defendants.
What did Solana Labs and Jito Labs allegedly do?
Burwick Law says Solana Labs and the Swiss-based Solana Foundation work in tandem to avoid US security laws while still extracting capital from the US market.
As such, it claims Solana, with its crypto infrastructure, provided “no investor protections, disclosure obligations, or legal accountability” for the memecoin craze and its losses.
Jito Labs, on the other hand, is accused of providing the MEV tooling and validator execution “necessary to scale the operation.”
Read more: Pump Fun taps high-profile lawyers to battle Burwick lawsuit
It claims, “Solana Labs and Jito Labs were knowing, intentional participants in the conduct at issue.”
“Pump Fun extracted fees on every trade and token launch. Solana Labs profited from increased token velocity and appreciation in SOL’s price. Jito Labs extracted MEV from high-traffic launches and earned commissions on validator throughput,” it added.
Is Pump Fun losing its game?
Pump Fun’s revenue and daily token launches haven’t been doing great since the highs it saw during Donald Trump’s inauguration. Indeed, the daily number of tokens launched on the platform dropped below 10,000, the lowest it’s been across 10 months.
Dune analytics by @adam_tehc showing Bonk Fun’s daily launchpad volume compared to Pump Fun’s.
Read more: Burwick Law founder likely behind Pump Fun memecoin, report
Meanwhile, its market share is seemingly being taken by rival Bonk Fun, which has enjoyed significant gains across token launches and revenue.
For instance, Bonk Fun’s 24-hour trading volume was $165 million while Pump Fun’s was $41 million.
Pump Fun’s ICO price is also not going amazingly. While the token has a significant 24-hour trading volume of $539 million, its price has dropped by 46% since its all-time high and has dipped below the public sale price of $0.004.
