A class action lawsuit has been filed against token launch platform Pump.fun, blockchain developer Solana Labs, and liquid staking protocol Jito, alleging the entities engaged in unlicensed gambling activities and monetized controversial trading practices.
The suit specifically claims Pump.fun functioned as an unlicensed casino, enabling high-risk, gambling-like speculation by lowering barriers to token creation and trading. It further alleges Solana Labs and Jito facilitated user front-running through Miner Extractable Value (MEV) techniques.
Legal experts cited argue that providing infrastructure for contentious activities, even within a permissionless environment, does not absolve these entities of accountability. The lawsuit highlights the significant economic scope, estimating the total financial impact of related platforms at between $4 billion and $5.5 billion.
Specific incidents referenced include the collapse of the PNUT meme coin and the promotion of the $LIBRA token by Argentina’s President Javier Milei. Pump.fun’s rapid ascent, notably achieving a $2 billion market capitalization soon after a $600 million token launch, underscores the appeal of its platform but faces scrutiny amidst the litigation.
The case underscores mounting concerns within the crypto ecosystem regarding high-risk speculative trading and the perceived lack of adequate safeguards and regulatory oversight for such platforms and practices.