South Korean prosecutors have charged several individuals in connection with CatFi, a Solana-based meme coin project, after alleging the token was used in a coordinated rug pull that siphoned investor funds.
The Seoul Southern District Prosecutors’ Office said in a Wednesday statement that five people face charges in the case. Two main suspects have been remanded in custody, while three others were indicted without detention.
Influencer Ruse, Fake Lockups
Investigators say the group created and launched CatFi in early 2025 through the Solana meme coin platform Pump.fun. The token attracted investors shortly after listing, but prosecutors allege the project was abandoned once sufficient funds had been raised. The case is notable because it represents the first time South Korea’s Virtual Asset User Protection Act was applied to prosecute a rug pull under fraudulent and unfair trading provisions. It is also the first known prosecution involving a crypto crime conducted via a decentralized exchange, a space that has generally been difficult to regulate.
Prosecutors found the suspects relied on more than token mechanics to generate interest, instead constructing a deceptive promotional ecosystem around CatFi. One accused individual reportedly posed online as an independent crypto influencer to drive investment in CatFi. Another managed the project’s official communications, where follower counts were artificially inflated and announcements falsely claimed tokens were locked up to create a misleading impression of stability.
Authorities also allege the group moved tokens across multiple wallets and engaged in wash trading to conceal control of the supply and to fabricate apparent market demand. According to the investigation, CatFi’s price spiked dramatically after launch, rising roughly 1,001 times within 26 hours, during which about 6,000 investors purchased the token.
Prosecutors reported that 256 investors later filed complaints alleging combined losses of about 900 million Korean won (approximately $600,000), while the suspects are believed to have taken profits exceeding 400 million won. Online blockchain analysts initially flagged the scheme by tracing wallet activity and publicly naming those involved, but the police initially closed the matter after the suspects claimed they had been hacked.
The case was reopened after the Financial Services Commission referred it to prosecutors, prompting a joint investigation by a crypto crimes unit and financial and tax authorities. The probe ultimately identified the suspects, including one person who evaded capture for three months by using disguises.
Two suspects were arrested on May 11, and the remaining three were detained later that week.
High User Activity Despite Allegations
Pump.fun has faced intense scrutiny for facilitating large-scale speculative token activity on Solana, where many newly created meme coins have been tied to scams such as rug pulls and pump-and-dump schemes. The platform’s simplicity for creating tokens and the low cost of transactions contributed to rapid trading activity.
Despite these allegations, the meme coin launchpad emerged as one of the Solana ecosystem’s top revenue-generating applications in 2025. Pump.fun was among seven Solana apps to report more than $100 million in revenue that year, underscoring the platform’s significant user activity even as regulators and analysts marked its role in risky token launches.