South Korean prosecutors have charged a group of individuals behind the Solana-based meme coin CATFI, marking the country’s first arrest and prosecution for a decentralized exchange (DEX) rug pull under the Virtual Asset User Protection Act. The Seoul Southern District Prosecutors' Office announced on May 27 that two main suspects were arrested and indicted for market manipulation, one was indicted without detention, and two others were charged with assisting the main suspect in fleeing.
The CATFI token was created on Pump.fun, a popular Solana memecoin launchpad, in early 2025. Prosecutors allege that the group orchestrated a classic rug pull: after listing the token on a DEX, they lured around 6,000 investors through fake social media promotions. The primary suspect posed as an independent influencer named "Eth Father", recommending CATFI while managing the project’s official channels, artificially inflating follower counts, and posting false lock-up plans. The group also used multiple wallets and wash trading to conceal their control of the token supply.
The price of CATFI skyrocketed 1,001-fold within 26 hours of issuance. When the promoters abandoned the project, 256 investors reported combined losses of approximately 900 million Korean won (about $586,000). The suspects allegedly used roughly 10 million won in criminal funds and gained around 400 million won (roughly $260,000) in illicit proceeds.
This case is the second enforcement action under the Virtual Asset User Protection Act, following an earlier case involving centralized exchange Bithumb and the ACE token. However, it is the first to target a DEX-based rug pull, which prosecutors described as a crime that had been in a "regulatory blind spot." Authorities from the Financial Services Commission and the Virtual Asset Crime Joint Investigation Unit collaborated with financial and tax agencies to track down the suspects, one of whom had been on the run for three months using various disguises.
The arrests signal a significant expansion of South Korea’s crypto enforcement efforts beyond centralized exchanges and influencers, setting a precedent for how meme coin fraud and DEX trading will be handled under the new law.
