Mev Trading Returns To Court In Pump.fun Class-action Lawsuit
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.
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:
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).
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.
Cointelegraph reached out to Burwick Law, the legal firm representing the plaintiffs, as well as Pump.fun, Jito Labs and the Solana Foundation, but did not receive any responses by the time of publication.
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.
Related: Pump.fun co-founder denies $436M cash out, claims it was ‘treasury management’
Source: CoinTelegraph
