Pump.fun and Solana face an expanded legal fight

The court battle between Pump.fun and the plaintiffs is also taking a longer path, following a federal judge who granted permission plaintiffs to classify their case

ContentsThe court leaves permission to amend the complaintInfrastructure claims and insider access claimsHistory of the class action litigationThe decision keeps defendants who are now known as Solana in a case that may transform risks in the entire ecosystem.

Pump.fun and Solana are currently gearing up to face once again the second round of litigation with a leave to file a second amended complaint granted by Judge Colleen McMahon. The order is preceded by a motion that was filed in September, following statements made by plaintiffs that they had access to new evidence. The case concerns investors who purchased tokens of the Pump.fun launched in March 2024 and stated that they had made immediate financial losses.

The court leaves permission to amend the complaint

After considering allegations related to new information, the court granted the plaintiffs the right to present their court with a second amended complaint. The plaintiffs argued that the evidence was given by a confidential informant who had been quiet for some time. The informant had given thousands of internal chat messages, as it is mentioned in the filings.

The defendants contended that the motion ought not to be granted for procedural reasons. They argued that the plaintiffs did not provide a proposed amended complaint. The court dismissed such an argument and decided that the request was legal. More time was also given to the plaintiffs to study and assimilate the new materials.

Consequently, the current motions to dispose of the previous complaint are still pending. It is possible that those motions will be rendered irrelevant after the new filing is provided. Once the amended complaint is filed, it is likely that the timeline of the case will restart.

Infrastructure claims and insider access claims

The revised claims consist of purported violations of the securities law, racketeering, and unjust enrichment. Court records claim that Pump.fun marketplace was not as neutral as presented. Plaintiffs assert that the system was biased against those parties having privileged access to Solana infrastructure.

The filings accuse insiders of using transaction ordering tools that were connected to Solana validators and Jito Labs. This access supposedly gave them access to the newly released tokens before retail clients. Plaintiffs claim that the practice corrupted the prices via the bonding curve design of the platform.

The insiders were allowed to purchase at lower prices in advance, as per the complaint. They were then able to sell when the price went high. Retail customers were accused of having gotten into the trades with high prices and incurred losses when prices went down.

History of the class action litigation

The case started at the beginning of the year when retail investors claimed to lose money on trading memecoins. Plaintiffs alleged that Pump.fun, its founders, Solana Labs, the Solana Foundation, and the top executives orchestrated the scheme. There are prominent Solana leaders named as defendants.

The plaintiffs claim that without validator coordination, the alleged conduct could not have been possible. They argue that Solana’s technical design was a key factor in facilitating the activity. The accused have refuted the accusations and are still appealing the allegations.

Pump.fun has also lost a protracted court proceeding with extended accusations and additional evidence. The result might affect accountability to platforms and practices in the market throughout Solana. The case will also be closely followed by the industry as it proceeds.