South Korea has filed its first criminal case over a decentralized finance rug pull involving a Solana meme coin. Prosecutors say the case centers on CATFI, a token allegedly used to defraud investors through market manipulation and fake promotion.
According to local reports, prosecutors charged a criminal group with manipulating the CATFI token price and illegally cashing out. Authorities say the scheme generated about 400 million Korean won, or roughly 260,000 dollars, while leaving retail traders with losses.
Investigators say the main suspect, identified only as Park, posed online as influencer “Eth Father.” They allege he promoted CATFI on social media as if he were an independent third party. After hyping the coin and drawing in buyers, the group allegedly pulled liquidity, crashing the price, hurting 256 investors, and causing about 900 million won in losses.
Because CATFI traded on a decentralized exchange, the token could be issued and listed quickly without traditional checks. Prosecutors say the group exploited that openness and the use of anonymous accounts to run the operation and vanish with investor funds.
First DEX Rug Pull Prosecution In South Korea
Officials say this is the first time South Korean authorities have arrested and prosecuted suspects for a rug pull on a decentralized exchange. The Seoul Southern District Prosecutors’ Office is handling the case and has recently stepped up its focus on crypto-related financial crime.
As rug pulls and meme coin scams spread globally, regulators in many countries are watching DEX activity more closely. In this case, South Korean investigators used on-chain analysis and social media evidence to trace wallets and link promotion accounts to the alleged organizers.
Prosecutors say the charges include fraud and violations of local capital markets and criminal profit laws. They argue that even when tokens trade on decentralized platforms, organizers can still be punished if they mislead investors and secretly dump tokens after pumping prices.
Since this is the first DEX rug pull case to reach prosecution in South Korea, it may guide future investigations. Legal experts say courts will now need to decide how existing fraud and securities laws apply to meme coins that trade only on-chain.
As more meme currencies hit Solana and other networks, regulators in South Korea are likely to tighten their stance on market misuse. Traders may see more closely monitored promotions within the country and increased cooperation between financial authorities and cybercrime units.
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