South Korean prosecutors have indicted five individuals for orchestrating a rug pull on a Solana-based meme coin called CATFI — the first criminal prosecution of a decentralized exchange rug pull in the country and the first case to apply fraudulent trading charges under the new Virtual Asset User Protection Act.
The scheme behind CATFI
The group launched CATFI on the pump.fun platform and used an influencer persona named 'EtherFather' to promote it. The ringleader, identified only as Park, operated under that alias while pretending to be an independent third party recommending the coin. In reality, he and his team controlled the token supply.
CATFI's price shot up 1,001 times in 26 hours, drawing in around 6,000 investors. But the run was a mirage. The group employed multiple wallets and circular trading to create artificial market activity and mask their control. When they cashed out, the price collapsed. Prosecutors say the illicit proceeds came to about 400 million Korean won.
Of those investors, 256 suffered confirmed losses totaling roughly 900 million Korean won — around $650,000.
First charges under new crypto law
This case marks a legal first for South Korea. It's the first criminal indictment for a DEX rug pull, and the first time prosecutors have used the fraudulent trading provisions of the Virtual Asset User Protection Act. The law, enacted last year, was designed to crack down on market abuse in crypto markets that regulators say have been rife with manipulation.
South Korean authorities have been tightening oversight of digital assets, but until now no one had been charged under this specific statute for a pump-and-dump on a decentralized exchange. The indictment signals that even pseudonymous schemes on Solana's pump.fun aren't beyond reach of the law.
The suspects and their roles
Two suspects were arrested and indicted on market manipulation charges. A third person was indicted without arrest. Two others face charges of obstructing justice for allegedly helping to cover up the operation.
Prosecutors haven't released full names, but they identified Park as the mastermind behind 'EtherFather.' The alias helped build trust among retail traders who thought they were getting a tip from an unbiased influencer. Instead, they were buying into a tightly controlled token pool.
The group used a network of wallets to simulate trading volume and hide the fact that they held most of the supply. When the price peaked, they dumped their holdings, wiping out the value for everyone else.
The case now moves to court, where the accused will face trial on charges that could set a precedent for how South Korea handles similar crypto frauds going forward.
