A federal judge in New York has permitted racketeering claims to move forward against Pump.fun's parent company and three of its founders, in a case that cites internal messages allegedly showing the memecoin trading platform was built to maximise user engagement rather than fair outcomes.
The case, Aguilar v. Baton Corporation, is being heard in the US District Court for the Southern District of New York under case number 1:25-cv-00880, before Judge Colleen McMahon. Plaintiffs are represented by Burwick Law and Wolf Popper. A second amended complaint, filed on January 7, 2026 and running to 186 pages, draws on internal communications dating from spring 2024 that the plaintiffs say came from a whistleblower.
Among the messages cited is one attributed to Alon Cohen, dated April 27, 2024, in which win rates on the platform are described as "really really low" and the activity itself as "gambling" that nonetheless leaves users "happier (even if most lose)". A separate exchange among the Pump.fun team on April 26, 2024 reportedly discusses adding "blinking lights" and "constant animation" to the interface, with one message referencing input from "a guy from Instagram" and describing certain design choices as "tactics". On May 1, 2024, Cohen is said to have shared a user's comparison of the app to crack. Pump.fun's lawyers have characterised such language as "puffery".
What survived and what did not
Judge McMahon's ruling, issued on August 31, 2026 and running 79 pages, dismissed Solana Labs, the Solana Foundation and their executives, including Anatoly Yakovenko, from the case. She also threw out securities-law claims tied to the FRED and GRIFFAIN tokens, and rejected the theory that buying a memecoin amounts to illegal gambling under New York law.
What remains are RICO claims against Baton Corporation and individuals Cohen, Dylan Kerler and Noah Tweedale, alongside allegations involving an association of 25 unidentified promoters. Fraud claims rest on three posts attributed to Cohen in late 2024 promoting Pump.fun as a "fair" launch platform free of rug pulls. Plaintiffs estimate retail losses at between $4 billion and $5.5 billion, though the judge narrowed the scope of the RICO claim itself to fees and execution losses, excluding broader trading losses from the case.
A platform still generating heavy fee revenue
Pump.fun charges a bonding-curve transaction fee of 1.25% per trade, split 0.95% to the protocol and 0.30% to token creators, and added a further 0.45% platform commission on its website and mobile app from October 17. Combined, a round-trip trade costs roughly 3.4% before any price movement. Pump products generated $63 million in revenue over the past 30 days and an estimated $1.38 billion since launch. Separately, analyst outlet The Smart Ape said on Saturday, October 24 it had identified a network of 43 wallets allegedly launching and bundling memecoins on Pump.fun before withdrawing liquidity, with one wallet said to hold about $1.03 million in USDC. Pump.fun's own data show that 98.6% of tokens created on the platform never gain meaningful traction.
The PUMP token itself trades at $0.0042, with a market capitalisation of $1.93 billion, down 52% from its record high of $0.0088 reached on September 14, 2025.
