Pump.fun’s bonding curves exemplify predatory design laundering illicit funds under U.S. jurisdiction: zero AML enables Lazarus rugs mixing hack SOL with retail buys, MEV/Jito front-running extracts value during peak American trading, and insider chats prove deliberate U.S.-timed dumps—netting $722M fees on $5B losses. Absent FinCEN oversight, it violates BSA core tenets, weaponizing Solana speed against vulnerable investors in an unregistered “meme casino.” S.D.N.Y. suits, backed by forensics, demand accountability; inaction risks broader crypto contagion, underscoring urgent need for DEX licensing to shield U.S. markets from global fraud inflows.
In Carnahan v. Baton Corp. d/b/a Pump.fun et al. (S.D.N.Y., Case Nos. 1:25-cv-00490 & 1:25-cv-00880), U.S. investors accuse Pump.fun of orchestrating a $4-5.5B money laundering scheme via Solana memecoin bonding curves. Filed January 2025 and amended with 5,000+ leaked exec chats by December, the RICO class action claims founders Alon Cohen and Dylan Kerler, plus Jito/Solana affiliates, ran a “Pump Enterprise” enabling no-KYC rugs: insiders and Lazarus hackers sniped cheap early supply, front-ran retail via MEV bots during U.S. hours, then dumped into Raydium pools—blending illicit SOL (e.g., QinShihuang token) with American liquidity for clean profits. Lacking FinCEN registration or AML/SAR filings, the platform processed $722M fees on 98.6% ruggy launches (Solidus Labs), violating BSA, securities laws, and wire fraud statutes. Judge McMahon allowed claims post-2025 rulings; motions due January 2026 amid intimidation allegations. No DOJ indictments yet, but suits signal regulatory crackdown on Solana’s scam-friendly speed, exposing U.S. retail to contaminated pools without protections—turning “fair launches” into unlicensed transmission hubs that evaded OFAC screening and Chainalysis tracing.
