The lawsuit against the memecoin launch platform Pump.fun, Solana Labs, the Solana Foundation and Jito was amended to include new evidence over MEV trading practices.
A US court is once again being asked to weigh in on maximal extractable value practices after a judge allowed new evidence to be added to a class-action lawsuit tied to a memecoin platform.
Key Takeaways
A judge has allowed new evidence to be added to a class-action lawsuit involving Pump.fun, Solana Labs, the Solana Foundation, and Jito
The new filing includes thousands of internal chat logs allegedly detailing coordination around MEV practices
The case could influence how U.S. courts approach MEV-related disputes in crypto markets
The judge granted a motion to amend and refile to include new evidence a class-action lawsuit against memecoin launch platform Pump.fun, the maximal extractable value (MEV) infrastructure company Jito Labs, the Solana Foundation, which is the nonprofit organization behind the Solana ecosystem, and others.
The motion said over 5,000 pieces of evidence in the form of internal chat logs were submitted by a “confidential informant” in September that were previously unavailable. The filing said:
“Plaintiffs assert that the logs contain contemporaneous discussions among Pump.fun, Solana Labs, Jito Labs, and others concerning the alleged scheme, and that they materially clarify the enterprise’s management, coordination, and communications.”
The lawsuit, originally filed in July, alleges that the Pump.fun platform deliberately misled retail investors by marketing memecoin launches as “fair,” but engaged in a scheme with Solana validators to front-run retail participants through maximal extractable value (MEV).
Allegations of Insider Advantage Through MEV
Maximal extractable value is a technique that involves reordering transactions within a block to maximize profit for MEV arbitrageurs and validators.
The plaintiffs allege that Pump.fun used MEV techniques to give insiders preferential access to new tokens at a low value, which were then pumped and dumped onto retail participants, who were used as exit liquidity by insiders.
Legal Uncertainty Around MEV Practices
The lawsuit could set a precedent for MEV cases in the United States, as the ethics of the practice continue to be debated within the crypto industry and legal bodies struggle to define proper regulations about the highly technical subject.
Anton and James Peraire-Bueno, the brothers accused of using a MEV trading bot to make millions of dollars in profit, went to trial in November in the US.
Prosecutors argued that the brothers tricked victims out of their funds, but defense attorneys said that they were executing a legitimate trading strategy and did not do anything illegal.
The jury struggled to reach a verdict in the case, and several jurors requested additional information to clarify the complexities surrounding the technical specifics of blockchain technology.
The case ended in a mistrial after the jury was deadlocked and failed to reach a verdict, highlighting the complexity of adjudicating legal disputes surrounding the application of nascent financial technology.
