Insider accused of profiting from MEV on Pump.fun, investors lost up to 5.5 billion USD

A class action lawsuit in America against Pump.fun is drawing significant attention from the crypto community, as allegations suggest that the MEV mechanism has been exploited to benefit insiders, while retail investors believe that token launches are fair.

New evidence has been introduced into the lawsuit

A whistleblower has released over 5,000 internal messages, alleged to show coordination among insiders in the launch of the token, timing of trades, and arrangement of block order on Pump.fun.

A U.S. federal judge has allowed the addition of this evidence to the class action lawsuit against Pump.fun, Jito Labs, Solana Labs, Solana Foundation, and some related executives. According to the court, the new documents are valid and directly relevant to the content of the lawsuit.

Main accusation: MEV gives an advantage to insiders

The plaintiff alleges that insiders are prioritized in accessing new memecoins through the MEV tool, while retail investors are promoted to believe that every launch is fair and transparent.

According to the lawsuit:

• Insiders can buy tokens right from the start at a very low price.
• Then quickly push the price up
• And exit the position early, leaving losses for investors

The lawsuit involves investors who purchased tokens on Pump.fun during the period from March 2024 to July 2025 and subsequently incurred losses. Total estimated damages range from 4.4 to 5.5 billion USD, while Pump.fun is accused of garnering hundreds of millions of USD in transaction fees.

What does Pump.fun promote to users?

In terms of public design, Pump.fun always emphasizes that:

• No presale
• No whitelist
• No private round
• Token creators must also buy on the open market like everyone else.

In theory and on paper, these statements are correct. No one is granted tokens before the sale opens.

The issue is not in buying early, but in being in the previous block.

According to the lawsuit, the crux of the issue is not who gets to buy early, but who is prioritized to have their transactions included in the block first.

This is where MEV draws attention.

In blockchain, the entity that controls the order of transactions in a block can buy before others, even if the orders are sent almost simultaneously. This creates an absolute advantage in launches with thin liquidity.

Insider “public buying” but still always buying in advance

The allegations suggest that there are insiders:

• Tokens cannot be issued beforehand
• But using bots and MEV infrastructure
• Pay high fees to get priority transaction processing
• Can coordinate with validator

The consequence is:

• The insider's order is always placed at the beginning of the block
• Retail investors, even if they click to buy at the same time, are still placed behind.
• On the interface, everyone buys publicly.
• However, the actual processing order has been manipulated, while Pump.fun continues to promote the system as fair.

How did the alleged scenario unfold?

According to the complaint, the entire process usually takes place in just a few seconds or a few minutes:

1. Token has just been launched
2. The insider used the MEV bot to buy right from the first block at a very low price.
3. Bonding curve drives the price up strongly due to very thin initial liquidity
4. Retail investors FOMO into buying at high prices
5. Insider selling after a few blocks
6. Price collapse
7. Retail investors are stuck

Meaning of the lawsuit

If the allegations are proven, the lawsuit could set an important precedent for:

• How token launch platforms promote fairness
• The role and responsibilities of MEV, validators, and blockchain infrastructure
• The level of protection for retail investors during memecoin offerings

The court's acceptance of new evidence shows that the legal risks for Pump.fun and related parties are increasingly rising, amid the ongoing controversy over MEV and fairness on the blockchain.

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