South Korea charges CATFI operators in first DEX rug-pull

Prosecutors in Seoul charged the operators of the Solana-based memecoin CATFI in what authorities say is South Korea’s first decentralized exchange rug-pull prosecution. The Seoul Southern District Prosecutors’ Office Virtual Asset Crime Joint Investigation Division apprehended the suspects.

Prosecutors allege the main defendant, surnamed Park, promoted CATFI on social media under the alias ‘Eth Father’ and coordinated a rapid sell-off. Investigators say the token’s price rose more than 1,000-fold in about 26 hours before the operators sold their holdings and realized roughly 400 million won in proceeds. Charges were filed under the Virtual Asset User Protection Act.

Authorities say at least 256 investors reported losses totaling about 900 million won. The rug pull occurred on a Solana-based decentralized exchange. CATFI reached an $8.99 million market capitalization at its February 2025 peak and has since fallen about 99% to roughly $57,000. At the time of reporting, 1,512 wallets still held the token and the largest single wallet controlled about 18% of the remaining supply. The social account used to promote the project was deleted.

A rug pull is an exit scam in which developers or insiders promote a token to attract outside investment and then quickly sell their holdings, leaving later buyers with steep losses as prices collapse. Prosecutors say the CATFI case involved coordinated promotion and price manipulation aimed at attracting outside funds prior to the operators selling their holdings.

The case follows other recent memecoin collapses on fast blockchains. In a separate May incident, an anonymous developer of a Solana-based meme token sold about $729,000 in holdings, producing rapid losses for some retail traders, including one trader who lost nearly $190,000 within an hour.

South Korea’s domestic crypto market has contracted. South Korea crypto holdings halved to 60.6 trillion won, while trading volume on major won-based exchanges fell to about 8% of KOSPI stock market volume, reducing liquidity for some retail-traded tokens and increasing the potential for rapid price swings when large holders move funds. Regulators have emphasized enforcement of consumer protection provisions in the virtual asset law and warned investors about memecoin volatility and the risk of coordinated manipulation.