Expanded $1.5 billion fraud allegations implicate Solana Labs and Jito Labs, associating them with the crypto project Pump.Fun.
In a recent development, Solana Labs and Jito Labs are facing a federal lawsuit under the Racketeer Influenced and Corrupt Organizations (RICO) Act. The amended complaint, filed by Burwick Law on July 22, 2025, in the Southern District of New York, accuses these companies of being central enablers of a large-scale memecoin fraud and illegal gambling operation via the Solana-based platform, Pump.Fun [1][2][3].
The lawsuit alleges that Pump.Fun operated as a "digital casino" disguised as a memecoin token launchpad, lacking Know Your Customer (KYC) protocols and investor safeguards [2][3]. This lax approach reportedly allowed for criminal abuse, with users able to launch tokens without identity verification.
The complaint implicates senior executives including Solana co-founders Anatoly Yakovenko and Raj Gokal, Solana Foundation CEO Dan Albert, and Jito CEO Lucas Bruder as active participants who profited from the scheme [3].
One of the most striking allegations involves the North Korea-linked Lazarus Group, who allegedly exploited Pump.Fun’s infrastructure to launch a memecoin called "QinShihuang." This token reportedly saw a trading volume spike to $26 million soon after launch, allowing the group to convert hacked funds from the Bybit exchange to Solana’s native token SOL [2][4].
Jito Labs is accused of enabling Pump.Fun’s platform to scale, providing validator and maximal extractable value (MEV) tools that improved transaction efficiency and revenue extraction [2][3].
The lawsuit also claims that Solana Labs and its Swiss-based foundation structured operations to evade U.S. regulatory oversight while benefiting from U.S. trader activity [2].
The platform promoted exploitative token launches without compliance, contributing to losses by retail traders who were effectively gambling on tokens [3][4]. Since the lawsuit's filing, Pump.Fun's usage has notably declined, with competitor Bonk Fun surpassing it in daily trading volume ($165 million vs. $41 million) [4].
In summary, the lawsuit accuses Solana Labs and Jito Labs of being central enablers of a large-scale memecoin fraud and illegal gambling operation via Pump.Fun, characterized by deceptive market practices, money laundering, and regulatory evasion [2][3][4].
Sources:
- CoinDesk
- Decrypt
- The Block
- Bloomberg
- Despite Solana Labs' and Jito Labs' denied involvement, the federal lawsuit alleges that they utilized cryptocurrency technology, specifically Pump.Fun's platform, to facilitate a large-scale memecoin fraud and illegal gambling operation.
- The lawsuit further claims that these companies failed to implement necessary Know Your Customer (KYC) protocols and investor safeguards in their token launches, allowing for criminal activities, such as money laundering, and exploitation by the North Korea-linked Lazarus Group.
