The trading of Samecoin on Solana is facing new legal scrutiny after investors accused several cryptocurrency companies of operating an unfair exchange system. A federal lawsuit alleges that private messages reveal coordination between blockchain engineers and a popular memecoin platform, giving an unfair advantage to some participants to the detriment of retail traders. A judge has allowed the case to proceed with the expansion of charges.
In brief
Investors claim that Solana, Pump.fun, and Jito have offered insiders quicker access to memecoin transactions through priority tools.
More than 5,000 private messages are cited as evidence of coordination during the development of Pump.fun.
A federal judge approved an amended complaint, giving the plaintiffs until January 7 to submit new allegations.
The lawsuit seeks damages, licensing obligations, and the confiscation of profits related to the alleged business practices.
The internal messages at the center of the Solana memecoin case
The lawsuit was filed earlier this year by memecoin investor Michael Okafor, along with other plaintiffs. Among the defendants are executives associated with Solana Labs, the Solana Foundation, as well as those from Jito Labs, the Jito Foundation, and Pump.fun. Investors allege that these entities collaborated to design a system that favored insiders while presenting it as fair to ordinary users.
The plaintiffs compare this system to a casino whose results are biased even before bets are placed. According to the lawsuit, certain team members had tools that allowed them to execute their transactions faster than regular users, giving them a decisive advantage when new tokens were launched.
In September, several defendants requested the court to dismiss the case, arguing that the allegations lacked specificity. However, before the judge could issue a ruling, Okafor's legal team presented new evidence. This included over 5000 private messages from a confidential source, which allegedly showed exchanges between Solana Labs engineers and Pump.fun regarding technical decisions made during the platform's development phase.
The deadline to submit the amended complaint is set for January
Okafor's lawyer, Max Burwick, indicated that a preliminary review of the messages revealed direct conversations about software integration and transaction management. These exchanges allegedly took place while Pump.fun was experiencing rapid growth and managing significant trading volumes.
On December 11, Judge Colleen McMahon authorized the filing of an amended complaint that incorporates these new elements. The plaintiffs have until January 7 to submit this updated version.
Lawyers representing companies linked to Solana believe that the lawsuit has little chance of success. They argue that the allegations are based on general claims and not on concrete evidence of illegal activity. Nonetheless, the court's decision to allow amendments constitutes an important step in the process.
Burwick also stated that he received violent threats after sharing updates about the case on social media, but clarified that this would not affect his work. No further details were provided.
A lawsuit against Pump.fun and Jito for alleged profits derived from insider trading
At the center of the dispute is Pump.fun, a platform used to launch and exchange memecoins on Solana. Investors claim that it operated within a coordinated system involving other companies in the Solana ecosystem. The lawsuit compares Solana to a casino, Pump.fun to a slot machine, and Jito's software to the mechanism that determines the order of execution of transactions.
According to the complaint, Jito's trading tools allowed certain operators to pay additional fees, similar to "tips," to move up in the execution queue. This mechanism allegedly enabled insiders to buy large amounts of new tokens before retail traders could intervene.
The plaintiffs' lawyers explain that the alleged system operated in several ways:
Token creators and some selected traders benefited from expedited access to transactions;
Jito's software allowed priority execution in exchange for higher fees;
Pump.fun promoted launches presented as fair, while insiders used advanced tools;
Retail traders used the same interface without benefiting from any speed advantage;
Insider users gained profits, while most retail users suffered losses.
Pump.fun claimed to promote "fair launches," with no presales, and protection against "rug-pull" scams. However, investors believe that these claims do not reflect the actual operations of the platform. Reports suggest that tutorials even encouraged token creators to buy their own tokens well in advance using priority tools.
The lawsuit describes the memecoin market as "extractive" and characterizes the system as a "rigged slot machine." The plaintiffs allege that up to 60% of users have lost money, with total losses potentially exceeding 4 billion dollars.
The fairness of memecoin trading on Solana is in doubt
Legal documents also question the economic logic of a system that would scare away users. According to the plaintiffs, the constant creation of new memecoins allowed the company to maintain a high trading volume despite losses. Even after a sharp drop since January, Pump.fun still records a daily trading volume of nearly 50 million dollars, according to DefiLlama.
Other companies also allegedly benefited from this activity. Many transactions were made through Jito's software, generating commissions. The heavy use of Solana's blockchain drove demand for SOL, contributing to its price increase during peak demand periods. The plaintiffs argue that these gains benefited entities linked to Solana, while retail traders operated under unbalanced conditions.
In addition to compensation for damages, the lawsuit demands strict legal measures. The plaintiffs request that the involved companies be placed under judicial administration if they do not obtain gaming and money transfer licenses. They also demand customer due diligence, anti-money laundering checks, and the confiscation of profits linked to the alleged scheme, including those associated with the price increase of SOL.
The defendants continue to deny any wrongdoing. In previous filings, Pump.fun, Jito Labs, and the Solana Foundation claimed that the lawsuit arose because operators sought to transfer their losses to third parties. They argue that statements about fairness and security were general marketing slogans, not legally binding commitments.
