South Korean prosecutors have filed charges against five individuals linked to the Solana-based meme coin CatFi, marking the first time the country's Virtual Asset User Protection Act has been used to prosecute a rugpull. Two of the suspects are in custody; three others were indicted without detention. The case also represents the first known prosecution of a crypto crime carried out through a decentralized exchange.
How the scheme worked
CatFi was created in early 2025 on Pump.fun, a Solana meme coin platform. According to prosecutors, the suspects built a fake online influencer identity, artificially inflated follower numbers, posted bogus token lock-up announcements, and conducted wash trading to create the illusion of demand. The strategy worked: CatFi's price surged roughly 1,001 times within 26 hours of launch, drawing in about 6,000 investors. When the rug was pulled, 256 investors reported total losses of about 900 million Korean won — roughly $600,000 — while the suspects are believed to have pocketed over 400 million won.
From closed case to criminal charges
The investigation didn't start smoothly. Police initially closed the case after the suspects claimed they were victims of a hack. But the Financial Services Commission later stepped in and referred the matter to prosecutors. A joint task force — pulling together a crypto crime unit, financial regulators, and tax authorities — tracked down the five individuals. One suspect evaded capture for three months by using disguises. Two were arrested on May 11; the remaining three were detained later in the week.
A legal first
South Korea's Virtual Asset User Protection Act took effect in 2024, but this is its first real test in a rugpull case. Prosecutors charged the group specifically under the law's fraudulent and unfair trading provisions. The fact that the crime was executed through a decentralized exchange adds another layer of precedent. Regulators are signaling they can and will pursue bad actors even when the platform isn't a traditional centralized exchange.
Pump.fun's role
CatFi launched on Pump.fun, the Solana-based platform that has faced repeated criticism for enabling scams. Still, Pump.fun was one of seven Solana apps that pulled in over $100 million in revenue in 2025. The platform's defenders argue it merely provides a launching pad; critics say it does too little to vet projects. This case will likely sharpen that debate.
The suspects now face trial under a law that prosecutors are eager to test. The outcome could set the tone for how South Korea handles the next crypto fraud — and whether the act's teeth are sharp enough to deter copycats.
