BlockBeats reports that on May 27, South Korean prosecutors have officially charged a Rug Pull scam related to the Solana ecosystem's meme coin CATFI. This marks the first time in the country that such actions on decentralized exchanges (DEX) have resulted in arrests and prosecutions under the Virtual Asset User Protection Act.

The Southern Seoul District Prosecutor's Office's Joint Investigation Unit for Virtual Asset Crimes stated that they have arrested and prosecuted two main suspects involved in market manipulation, while another was charged without detention. Additionally, two others have been charged for assisting the main culprits in fleeing. The investigation revealed that the gang created the CATFI token on the Pump.Fun platform in early 2025, subsequently launching it on decentralized exchanges and executing a cash-out scheme. The main suspect, Park, operated under the pseudonym 'Eth Father,' promoting the token by releasing false positive news and buying followers, while using multiple wallets to diversify holdings and engage in wash trading to obscure the fact that he controlled the token.

The CATFI token price skyrocketed 1001 times within 26 hours of its launch, with around 6000 investors jumping in, ultimately leading to losses of about 900 million KRW (approximately $586,000) for 256 investors. Prosecutors claim that the gang used around 10 million KRW of illicit funds to rake in about 400 million KRW in illegal profits.

This case marks a significant extension of South Korea's crackdown on virtual asset crimes from centralized exchanges to the DEX space. Prosecutors stated they will 'vigorously tackle actions that disrupt the digital asset market and undermine public trust.' This case could set a precedent in South Korea for addressing meme coin fraud, social media promotions, and DEX trading under virtual asset laws. Previously, South Korea handled its first centralized exchange price manipulation case under the same law in January 2025, and has been ramping up regulation lately, including requiring financial influencers to disclose their holdings and paid promotion details.