South Korean prosecutors have charged a group accused of running a rug pull tied to CATFI, a Solana-based meme coin.
Summary
- South Korean prosecutors charged CATFI operators in the country’s first DEX rug pull arrest case.
- Investigators say the Solana meme coin surged 1,001-fold before 256 investors suffered heavy losses.
- The case shows Korean prosecutors moving virtual asset fraud enforcement beyond centralized exchanges and influencers.
Digital Asset reported that the case marks the country’s first arrest and prosecution linked to a DEX rug pull under the Virtual Asset User Protection Act.
The Seoul Southern District Prosecutors’ Office said its Joint Investigation Department for Virtual Asset Crimes arrested and indicted two people for alleged market manipulation. One other person was indicted without detention, while two others were charged with helping the main suspect flee.
Prosecutors say CATFI was promoted through false posts
Investigators said the group created CATFI on Pump.Fun in early 2025, listed it on a decentralized exchange, and then carried out the rug pull. Pump.Fun is widely used for Solana meme coin launches because users can create new tokens with a low barrier.
The main suspect, surnamed Park, allegedly acted online as the influencer “Eth Father.” Prosecutors said he posed as an unrelated third party, recommended CATFI purchases, managed project social media accounts, inflated follower counts, and posted false positive announcements.
The group also allegedly spread CATFI across several wallets and used circular trading to hide that the issuing side controlled the token. Prosecutors said this amounted to “the use of fraudulent means, plans, or techniques” and false statements about material facts linked to digital asset trading.
CATFI surged 1,001-fold before losses
CATFI’s price rose 1,001-fold within 26 hours of issuance, according to Digital Asset. Around 6,000 investors bought the token, while 256 investors later suffered losses of about 900 million won, or roughly $586,000.
Prosecutors said the group used about 10 million won in criminal funds and gained about 400 million won, or roughly $260,000, in criminal proceeds. The case is also the second known matter under the Virtual Asset User Protection Act, after an earlier centralized exchange case.
As reported by crypto.news, two South Koreans were arrested in January 2025 over alleged price manipulation on Bithumb involving the Fusionist token, ACE. That earlier matter was described as the first case fast-tracked by the Financial Services Commission under the same law.
South Korea expands crypto enforcement
South Korea has continued to widen its crypto oversight. As previously reported, lawmakers proposed rules in February requiring financial influencers to disclose crypto holdings and paid compensation when promoting tokens or stocks.
Regulators have also tightened exchange controls. In April, the Financial Services Commission ordered domestic exchanges to run five-minute balance checks, add automatic trading halts for large mismatches, and complete monthly audits after a major Bithumb payout error.
The CATFI case adds a DEX-focused test to that enforcement push. It shows prosecutors are no longer limiting virtual asset fraud cases to centralized exchanges, listed tokens, or local trading venues.
The prosecution said it would “resolutely deal with acts that disrupt the digital asset market and undermine public trust.” The case may now become a key reference point for how South Korea handles meme coin fraud, social media promotion, and DEX trading under its virtual asset law.
