In a significant development for South Korea’s cryptocurrency landscape, prosecutors have charged five individuals over a meme coin rug pull involving the token CatFi, in what marks a historical application of the country’s new Virtual Asset User Protection Act. The alleged scheme, executed on the Solana launchpad Pump.fun, reportedly caused losses amounting to approximately 900 million WON, or $600,000, affecting 256 investors.
According to the Seoul Southern District Prosecutors’ Office, the defendants launched CatFi in February 2025, which initially saw a dramatic spike in market capitalization, reaching up to $8.37 million within hours. This rapid appreciation, however, was short-lived, as the value plummeted to a mere $12,170 shortly thereafter. Prosecutors attribute this crash to the defendants engaging in “mass selling,” a tactic characterized as a “rug pull.”
The prosecution reveals that the five individuals pocketed over 400 million WON ($267,000) from the operation. Among them, two individuals responsible for promoting the token on social media have been arrested, while the remaining three, who managed the technical aspects and allegedly helped their co-defendants evade capture, face charges but are not yet in custody.
The case represents a pivotal moment, as it is the first instance of South Korea applying its Virtual Asset User Protection Act to prosecute a crypto crime associated with a decentralized exchange. Nick Vaiman, co-founder of blockchain analytics firm Bubblemaps, praised the actions of the Korean government, stating that previous community-led investigations into rug pulls often led to no real consequences. Vaiman expressed hope that the new law would pave the way for more accountability and protection for retail investors.
In an unexpected twist, the news surrounding the prosecutions prompted a remarkable resurgence of the CatFi token, with traders driving its value up nearly 6,000% from $2,350 to around $167,000 within a day. Before this surge, the token had languished without any trades since August 2025. A new social media account has also been established by the token’s creators, claiming intentions to “unrug” the token. Although this price rally has sparked optimism among some investors, the CatFi token remains 96% below its all-time high of February 2025, leaving many hoping for a successful recovery.
