South Korea Makes First Arrest in Landmark CatFi Rugpull Case
In South Korea, the Seoul Southern District Prosecutors’ Office has arrested operators of the Catfi rugpull, a Solana-based meme coin, marking the first prosecution related to a DEX rug pull under the Virtual Asset User Protection Act, which took effect in July 2024.
The scheme attracted around 6,000 investors, with a token that surged 1,001-fold in 26 hours before collapsing, resulting in losses of about 900 million won (~$586,000) for 256 investors.
The operators extracted approximately 400 million won (~$260,000) from an initial investment of just 10 million won.
This case highlights the reach of South Korea’s virtual asset enforcement framework into decentralized trading environments and is only the second known prosecution under this law, following a January 2025 Bithumb price manipulation case.
DEX Liquidity Manipulation and the Legal Basis: How South Korean Prosecutors Constructed the Catfi Rugpull Case
Catfi was launched in early 2025 on Pump.Fun, a Solana-based token launchpad, was soon listed on a decentralized exchange for retail buyers without KYC.
The scheme involved spreading Catfi holdings across multiple wallets and executing circular trading to fake organic volume while hiding the controlling party’s influence.
The main suspect, Park, masqueraded as the influencer “Eth Father,” promoting Catfi while managing its social media, inflating follower counts, and issuing false announcements.
After a 1,001-fold price surge attracted retail liquidity, the group executed a rug pull, crashing the token’s value. Prosecutors invoked the Virtual Asset User Protection Act to assert jurisdiction, citing harm to Korean users despite the offshore infrastructure.
Catfi Project Operators: Arrest Details, Alleged Roles, and the Scale of Investor Losses
The Seoul Southern District Prosecutors’ Office arrested and indicted two individuals for market manipulation related to the Catfi project, with another person indicted without detention, and two others charged for assisting the main suspect, Park, in evading authorities.
Park, under the ‘Eth Father’ persona, was accused of promoting the token to retail buyers while secretly controlling project operations, giving the illusion of independent endorsement.
The scheme unfolded rapidly; Catfi launched in early 2025, and within 26 hours, its price surged before a rug pull left 256 investors with losses.
The project leveraged a Telegram-based gaming environment to enhance its reach through established community channels.
What to Watch: South Korean DEX Enforcement Expansion, Catfi Prosecution Outcome, Influencer Disclosure Rules, and Regional Regulatory Precedent
The outcome of the Catfi prosecution, charges, sentencing, and the recovery of 400 million won, will influence the deterrent effect of the Virtual Asset User Protection Act against future DEX rug pulls.
A strong conviction and asset recovery would validate the statute, while a weak outcome could weaken it. Additionally, South Korean authorities may either broaden the Act’s scope beyond Catfi or limit it to this specific case due to Park’s visibility.
If regulators push for clearer disclosure on DEX liquidity pools and developer wallets, the Catfi case could prompt legislative changes.
It’s also unclear whether neighboring countries like Japan, Singapore, or Hong Kong will adopt similar measures, or whether South Korea’s approach will remain unique.
The author does not hold or have a position in any securities discussed in the article. All prices were quoted at the time of writing.
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