South Korea Makes First Arrests in DEX Rug Pull Case, Charges Five Over CATFI Memecoin

May 27, 2026

South Korean prosecutors charged five individuals in the country's first criminal case targeting a decentralized exchange rug pull, involving the Solana-based CATFI memecoin traded on Pump.fun. The scheme defrauded approximately 256 investors of roughly $650,000 after the token surged over 1,000x before collapsing when liquidity was withdrawn. The Seoul Southern District Prosecutors' Office applied the Virtual Asset User Protection Act to the coordinated wash trading and liquidity extraction.

CATFI memecoin scheme

▪The CATFI token was launched on Solana and traded primarily through decentralised platforms, including Pump.fun.
▪The CATFI token collapsed after liquidity was withdrawn and large holdings were sold off.
▪CATFI token operators engaged in coordinated trading behaviour including wallet splitting and wash trading patterns to simulate organic demand.
▪CATFI token increased by more than 1,000 times in value within a short period at its peak.
▪A key figure in the CATFI token promotion reportedly used the alias "Eth Father" and presented themselves as a credible community leader.

Criminal arrests

▪Two primary suspects were arrested in connection with the CATFI memecoin scheme.
▪The Seoul Southern District Prosecutors' Office Virtual Asset Crime unit led the investigation into the CATFI memecoin case.
▪Additional suspects are being investigated for allegedly helping key figures evade arrest during the CATFI inquiry.

Fraud charges

▪Five individuals in total were charged in connection with the CATFI memecoin scheme.
▪Investigators identified roughly 400 million won, or about 260,000 US dollars, in illicit profits linked to the CATFI scheme.
▪The CATFI case is being prosecuted under South Korea's Virtual Asset User Protection Act.

Investor losses

▪CATFI operators extracted value through early liquidity positions and coordinated sell-offs, leaving late participants exposed to the sharp price reversal.
▪Total losses from the CATFI collapse are reported at approximately 900 million won, which is about 650,000 US dollars.
▪Approximately 256 investors were directly affected by the CATFI token collapse.

South Korea DEX enforcement

▪South Korean prosecutors applied the Virtual Asset User Protection Act to on-chain activity in the CATFI case.
▪The CATFI case is the first known case in South Korea where prosecutors have pursued criminal charges specifically tied to a DEX-based memecoin rug pull.
▪The CATFI memecoin case marks South Korea's first formal criminal action targeting a memecoin scam that unfolded entirely through a decentralised trading environment.
▪South Korean prosecutors are actively tracing wallet activity, promotional networks, and liquidity movements tied to token launches on decentralised exchanges.