South Korea charges CATFI operators over rug pull

South Korean prosecutors charged a group linked to the Solana-based memecoin CATFI in what local media described as the country’s first decentralised exchange rug-pull prosecution under the Virtual Asset User Protection Act.

The Seoul Southern District Prosecutors’ Office’s Virtual Asset Crime Joint Investigation Division reportedly arrested the group after alleging the suspects manipulated the CATFI token price and caused about 900 million won ($599,000) in losses to at least 256 investors.

Prosecutors alleged the main suspect, surnamed Park, posed as “Eth Father” on social media and falsely promoted CATFI as an independent third-party project before orchestrating the alleged rug pull.

Authorities claimed the group promoted CATFI aggressively online, pushed the token’s value up more than 1,000-fold within 26 hours and later sold holdings for around 400 million won ($260,000) in illegal profit.

The case marked South Korea’s first arrest tied to a memecoin rug pull under the country’s crypto investor protection laws, signalling a tougher regulatory stance against coordinated token manipulation schemes.

CATFI surged to an $8.99 million market capitalisation in February 2025 before collapsing 99% to roughly $57,000, while data from Pump.fun showed more than 1,500 investors were still holding the token despite the crash.

The prosecution came as South Korea’s domestic digital asset market weakened sharply, with local media reporting trading volumes on major won-based crypto exchanges had fallen to just 8% of the KOSPI stock market’s trading activity.

At the time of reporting, Solana price was $80.90.