Solana (SOL) dropped roughly 8% over the past week to trade near $122 as investors reacted to a class-action lawsuit alleging insider manipulation at memecoin launchpad Pump.fun and renewed macroeconomic stress from global trade policy tensions.
What Happened: RICO Lawsuit Targets Solana Ecosystem
Plaintiffs filed an amended complaint in federal court on Jan. 7 citing the Racketeer Influenced and Corrupt Organizations (RICO) Act against Baton Corp, which operates Pump.fun, along with the Solana Foundation, Solana Labs and certain officers.
The lawsuit alleges that token launches on Pump.fun were manipulated to give insiders priority access through Solana's validator and transaction infrastructure.
This allegedly allowed privileged participants to purchase tokens at the lowest prices before retail buyers could enter.
"What appeared to be a fair, automated marketplace was, Plaintiffs say, structurally tilted to extract value from ordinary users while rewarding those with privileged access to Solana's infrastructure and Jito Labs' transaction ordering tools," according to the complaint shared by Burwick Law on social media.
Global markets have simultaneously turned risk-off amid political tensions over U.S. trade policy and European stock declines. The native PUMP token, which surged from $0.0019 to $0.003 by Jan. 17, has since reversed to $0.0025.
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Why It Matters: Positive News Ignored
Traditional finance players announced plans this week to trade tokenized stocks including Nvidia and Microsoft on Solana through Ondo Finance, which would typically boost sentiment.
Instead, the market ignored the development.
Analyst Fatima of 99Bitcoins described the tokenization partnership as a long-term growth signal for the network.
But fear-driven selling has overwhelmed bullish catalysts. Solana's price volatility tends to exceed Bitcoin's (BTC), with SOL often falling harder during broader market declines.
If the $120 support level breaks, analysts warn SOL could slide toward $100, where multiple long-term support levels would be lost.
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