South Korea Arrests CatFi Suspects in First Crypto Rugpull Case

TLDR

• South Korea prosecutors charged five individuals linked to the CatFi rugpull on Solana.
• Authorities applied the Virtual Asset User Protection Act for the first time in a rugpull case.
• The suspects allegedly abandoned the project after attracting thousands of investors.
• The group promoted CatFi using fake social media accounts and misleading claims.
• Prosecutors said the token surged 1001% within 26 hours of launch.

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South Korea prosecutors have charged five individuals linked to the Solana-based memecoin CatFi project. Authorities allege the group conducted a rugpull after attracting thousands of investors. The case marks the first application of the country’s Virtual Asset User Protection Act to such a scheme.

South Korea Applies New Law to CatFi Rugpull Scheme

Prosecutors from the Seoul Southern District Office filed charges against two detained suspects and three others. The group allegedly launched CatFi on Pump.fun in early 2025.

Authorities said the suspects abandoned the project after raising funds from investors. This action is widely known in crypto markets as a rugpull.

Prosecutors confirmed this is the first case applying the Virtual Asset User Protection Act to such crimes. They also described it as the first prosecution involving a decentralized exchange.

Officials said the law targets fraudulent and unfair trading practices in digital asset markets. The release stated that rugpull schemes have remained a common crime in the sector.

The suspects allegedly promoted CatFi through fake social media accounts. One individual posed as an independent crypto influencer to attract buyers.

Another suspect reportedly controlled official channels and inflated follower numbers. The group also shared false lock-up plans to create trust.

Investors Lose $600,000 as Authorities Track Suspects

Prosecutors said the group used multiple wallets to distribute tokens and hide ownership. They also conducted wash trading to mask their control of supply.

The token’s value reportedly surged 1,001% within 26 hours of launch. Around 6,000 investors bought into the project during that period.

Out of these investors, 256 reported losses totaling 900 million won, about $600,000. The suspects allegedly earned over 400 million won in profits.

Authorities said earlier reports identified the suspects and their wallet addresses. However, police closed the case after suspects claimed they were hacked.

The Financial Services Commission later referred the case for further investigation. A joint unit then worked with tax and financial agencies to trace the group.

One suspect reportedly evaded capture for three months using disguises. Investigators eventually located and arrested him along with others.

Authorities arrested two suspects on May 11 and detained three more on Wednesday. Prosecutors stated that enforcement actions will continue against similar crimes.

“The prosecution remains committed to ensuring that market manipulation leads to total financial and personal ruin,” officials said.

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