On May 27, 2026, the Seoul Southern District Prosecutors’ Office indicted five people involved in the CatFi memecoin scheme on the Solana blockchain. Two key suspects were arrested, while three others were charged without detention.
This marks the first time in South Korea that a rug pull has been prosecuted under the country’s new Virtual Asset User Protection Act. It is also the first criminal case involving fraud carried out through DEX.
How the Scheme Worked
The token launched in early 2025 through the Pump.fun platform. To attract victims, the team spent months using several coordinated tactics.
One of the main suspects operated a fake account impersonating the well-known crypto influencer Eth Father and actively encouraged users to buy CatFi.
Another suspect managed the project’s official Telegram channel and X account, inflating follower counts and posting knowingly false information about liquidity lockups and future development plans.
Using a network of controlled wallets, the organizers carried out wash trading — artificial transactions designed to create the illusion of strong demand while hiding the true concentration of tokens held by the team.
Within 26 hours of launch, the token’s price surged more than 1,000x. Around 6,000 investors entered the project before the organizers dumped their holdings, sending the price crashing to nearly zero.
Profits Made by the Scammers and Investor Losses
A total of 256 investors who filed official complaints lost KRW 900 M, or roughly $650 K.
According to prosecutors, the suspects earned more than KRW 400 M, or around $290 K, despite investing only about KRW 10 M into the scheme.
The Investigation
At first, authorities considered closing the case after the suspects claimed their wallets had supposedly been hacked.
However, after the Financial Services Commission (FSC) transferred the case materials to prosecutors, a joint investigation was launched involving tax and financial authorities.
On-chain analysts helped identify the organizers. One suspect reportedly spent three months in hiding while changing his appearance.
The two main suspects were arrested on May 11, while the remaining three were indicted in absentia on May 27.
Prosecutors said they will continue aggressively pursuing similar schemes.
“Those seeking rapid wealth through illegal methods in the virtual asset market must understand that market manipulation inevitably leads to complete financial and personal ruin,” the press release said.