South Korean prosecutors have charged a group of individuals connected to CatFi, a Solana-based meme coin project, alleging they orchestrated a rug pull scheme after attracting investor funds.
Charges and Suspects
The Seoul Southern District Prosecutors’ Office announced Wednesday that five individuals face charges related to the case. Two primary suspects are in custody, while the other three have been indicted without detention.
Alleged Scheme
Investigators say the group launched CatFi in early 2025 using the Solana meme coin platform Pump.fun. The project quickly gained investor interest, but the creators abandoned it after accumulating sufficient funds. Prosecutors emphasized the legal significance of the case, as it marks the first time the country’s Virtual Asset User Protection Act has been used to prosecute a rug pull under fraudulent and unfair trading provisions. It is also the first known prosecution involving a crypto crime carried out through a decentralized exchange, which had previously been largely unregulated.
Deceptive Practices
According to the findings, the suspects employed misleading promotional tactics to generate interest. One of the accused allegedly posed as an independent crypto influencer, promoting CatFi to attract investment. Another individual managed project communications, artificially inflating follower counts and posting announcements about fake token lock-up arrangements to create an illusion of stability.
Market Manipulation
Authorities further allege the group circulated tokens across multiple wallets and engaged in wash trading to conceal their control over the supply and simulate genuine market demand. Following the launch, CatFi’s price reportedly surged dramatically, increasing by approximately 1,001 times within 26 hours. During this period, around 6,000 investors purchased the token.
Investor Losses and Profits
Prosecutors stated that 256 investors reported total losses of approximately 900 million Korean won, equivalent to around $600,000. The suspects are believed to have secured profits exceeding 400 million won. The scheme initially drew attention from online blockchain analysts who traced wallet activity and identified those involved. However, police initially closed the case after the suspects claimed they had been hacked.
Investigation and Arrests
The Financial Services Commission later referred the matter to prosecutors, leading to a joint investigation involving a dedicated crypto crime unit and financial and tax authorities. The investigation led to the apprehension of the suspects, including one individual who evaded capture for three months using disguises. Arrests of two suspects occurred on May 11, with the remaining three detained later on Wednesday.
Scrutiny of Pump.fun
Pump.fun has faced scrutiny for enabling large-scale speculative token activity on Solana, where many newly created meme coins are linked to scams like rug pulls and pump-and-dump schemes. The platform’s ease of token creation and low transaction costs facilitated rapid trading. Despite this, the meme coin launchpad was one of the top revenue-generating applications in the Solana ecosystem in 2025, earning over $100 million in revenue.
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