BlockBeats report: On May 27, South Korean prosecutors filed charges in connection with a rug pull scam involving the Solana ecosystem meme coin CATFI, marking the country’s first arrest and prosecution under the Virtual Asset User Protection Act for such activity on a decentralized exchange (DEX).
The Seoul Southern District Prosecutors’ Office’s Joint Investigation Unit for Virtual Asset Crimes has arrested and indicted two main suspects suspected of market manipulation, while a third suspect was indicted without detention. Two additional individuals have been charged with aiding the main suspects in fleeing. The investigation revealed that the group created the CATFI token on the Pump.Fun platform in early 2025, and after listing it on a decentralized exchange, executed a rug pull. The lead suspect, Mr. Park, operated under the online persona “Eth Father,” promoting the token by disseminating false positive news and purchasing followers, while using multiple wallets to distribute holdings and conduct circular trades to conceal his control over the token.
The CATFI token price surged 1,001 times within 26 hours of its launch, prompting approximately 6,000 investors to purchase it, ultimately resulting in 256 investors suffering losses of about 900 million Korean won (approximately $5.86 million). Prosecutors stated that the group used approximately 10 million Korean won in criminal proceeds to generate around 400 million Korean won in illicit profits.
This case marks South Korea’s enforcement against virtual asset crimes as it expands from centralized exchanges to the DEX space. Prosecutors stated they will “firmly address actions that disrupt digital asset markets and undermine public trust.” This case could become a landmark precedent in South Korea for prosecuting Meme coin fraud, social media promotion, and DEX trading under the Virtual Asset Act. Previously, South Korea handled its first centralized exchange price manipulation case under the same law in January 2025 and has since intensified regulatory efforts, including requiring financial influencers to disclose their holdings and paid promotions.