Interesting new continues to boil in the Solana world. A sleeper amendment was made to a class action lawsuit in the U.S. against Jito Labs, Solana Foundation and Pump.Fun. The overall argument is that there was alleged collusion between the folks running the three entities to create a rigged gambling environment on Pump.Fun that 1) wasn't regulated, 2) wasn't approved, and 3) no investor protections among other issues. The difference in this lawsuit versus the usual civil direction that ends up with the Securities Exchange Commission (SEC) at the worst is that this case is arguing for RICO.
RICO, the acronym for the federal crime under Racketeer Influenced and Corrupt Organizations Act, is a brutally effective legal position that has historically been used by the U.S. federal government to bust up organized crime. Not only does it go after the direct actors of an alleged crime, it also sucks in everyone who might have been connected, even distantly indirectly connected. Additionally, because the criminal sentence on a conviction can be as much as 30 years in federal prison, it's a practical "life-ender" for most adults accused. Practically 99% of defendants charged and indicted by the Department of Justice end up pleading to lower the time in prison substantially.
The tact here is using a class action suit from a civil angle to assert RICO and then prove the case for the DOJ to step in and apply criminal charges. It's attractive to the federal government because they don't have to do the work and, if the case is strong, it's ready for them to step in and drop the criminal hammer. So, it's a very serious risk for anyone associated with this Solana case, depending how deep things go.
So why the amended filing? What changed? The original case was filed in January 2025 against Pump.Fun only. As it turns out, the firm pursuing the case as the plaintiff, Burwick, believes through additionally-obtained evidence, it can spell out the relationships of an intentional and concerted effort to use Pump.Fun on the Solana chain to essentially steal people's money with fraud and fake token pumps. Pump.Fun is notoriously famous for a blizzard of ridiculous meme tokens that spike and die within 48 hours, with millions of dollars moving on these spikes and the next meme issued. The greed alone for the being on the inside curve of these momentary spikes makes it extremely easy to consider the argument of additional steering of activity under a fraudulent scheme, allegedly.
The jurisdiction applied in the case is going to be an issue. For example, Solana Foundation is based in Switzerland, not the U.S. Jito Labs, however, is based in Virginia. So, they are definitely going to get pulled into court directly for any kind of response. And the case is filed in New York, an arena that has historically eviscerated crypto exchanges. CoinEx wrote off the entire U.S. market in a settlement as a result of dealing legally with New York a few years ago.
The filing on the Solana players is early, but if it gets legs and runs, it could be a redux of the Ripple XRP torture. We'll have to watch how it plays out with the success of the class action petition, but the stakes are high in this one.
