A federal judge has dismissed the securities claims against Pump.fun’s operator and cleared Solana Labs, the Solana Foundation, and their executives from the case entirely. The racketeering claims against the platform’s three founders survived.
The Securities Act counts that opened this case in January 2025 are gone, dismissed with prejudice as to the only two tokens the named plaintiffs actually bought, on the ground that a memecoin bonding curve is not a common enterprise. What remains is the allegation that Pump.fun was run as a criminal enterprise.
Judge Colleen McMahon of the Southern District of New York granted in part and denied in part the defendants’ motions to dismiss in an opinion filed on August 31, in Aguilar v. Baton Corporation Ltd., case 25-cv-880.
Solana Knew the Platform Was Busy, Not That It Was Rigged
The court found that plaintiffs plausibly alleged Solana Labs maintained the infrastructure Pump.fun ran on, implemented network updates that eased congestion affecting the platform, and provided technical assistance to its developers.
None of that established knowledge of the alleged deception. The court held that knowing Pump.fun was a highly active memecoin platform is not the same as knowing it was giving favored promoters advance token information while representing its launches as fair.
The judge applied the same reasoning to the economic-interest argument. An ordinary commercial motive to increase revenue becomes evidence of fraudulent intent only when facts connect that motive to the fraud alleged, and no such facts were pleaded. Solana Labs, the Solana Foundation, Yakovenko, Gokal, Dan Albert, Austin Federa, and Lily Liu are dismissed from the racketeering counts.
RICO Survives Against Baton and Its Three Founders
Plaintiffs Kendall Carnahan and Michael Okafor adequately pleaded both substantive RICO and RICO conspiracy claims against Baton Corporation, chief executive Alon Cohen, chief technology officer Dylan Kerler, and chief product officer Noah Tweedale. Diego Aguilar’s claims were dismissed for failure to allege a domestic RICO injury.
The wire-fraud predicates rest on three statements Cohen posted on X in late 2024 describing Pump.fun as an unruggable fair launch platform and an even playing field. The court held that these communicated something factual rather than mere enthusiasm and that if Cohen personally controlled the advance access that allegedly advantaged selected promoters, he knew facts inconsistent with them.
For Tweedale, the court pointed to April 2024 Telegram messages reproduced in the complaint in which Cohen allegedly instructed him to reduce a promoter’s early token position. For Kerler, it cited allegations that he built execution tools optimizing what plaintiffs call insider-first execution. Plaintiffs estimate retail losses across the platform at $4 billion to $5.5 billion.
A Bonding Curve Is Not a Common Enterprise
The Securities Act counts covered twenty tokens. Plaintiffs had class standing only for FRED and GRIFFAIN, the two they personally purchased, because each token involved different project-specific promises and would turn on different proof. The other eighteen were dismissed without prejudice on standing grounds.
On the merits, the court held the FRED and GRIFFAIN sales do not plausibly involve investment contracts under Howey because plaintiffs failed to plead a common enterprise. Pooling SOL in a token-specific bonding curve is not enough on its own. Horizontal commonality requires the pooled assets to fund some underlying venture whose success or failure determines purchasers’ fortunes as a group, and the complaint alleged no such venture.
The judge noted that the plaintiffs’ own theory defeats the argument. If insiders bought early, drove the price up, and exited before the collapse, that is the opposite of the shared fortunes a common venture requires. Strict vertical commonality failed as well, because Baton collected its one-percent fee on every trade regardless of whether the trader profited, placing it on the stockbroker side of the line rather than the investment-manager side. Counts III and IV are dismissed with prejudice as to both tokens.
Memecoin Trading Is Not Gambling Under New York Law
The court rejected the gambling predicates entirely. A Pump.fun purchaser exchanged SOL for a token and received it immediately, and any later sale returned the price the curve dictated at that moment as consideration for giving up ownership, not as a payout triggered by a contingent event.
Buying an asset does not become a wager merely because its resale value depends on uncertain future demand, the court held, noting that the alternative would make volatile stocks, commodities, and collectibles into gambling. References to Pump.fun as a casino, including comparisons made by the defendants themselves, do not change the statutory analysis.
The Money Transmission Claim Survives
One predicate did survive alongside wire fraud. The court held plaintiffs plausibly alleged Baton operated an unlicensed money-transmitting business under 18 U.S.C. § 1960 because the bonding-curve contracts accepted one form of value and transmitted another as part of an exchange run for a fee, without FinCEN registration. Cohen, Kerler, and Tweedale were adequately alleged to have conducted or directed part of that business.
The Solana defendants escaped this count too, under the regulatory exclusion for parties providing only the network access services a money transmitter uses. On damages, trading losses failed RICO’s proximate-cause requirement because calculating them would require reconstructing a counterfactual trading history. Execution losses and transaction fees survived.
The Crypto Times reported in December 2025 when the court permitted the second amended complaint that produced this ruling and has covered the litigation since the first filings in early 2025. Burwick Law, which brought the case, has since filed a proposed class action against Magic Eden.
