First-Ever Crypto Fraud Case Under New Investor Protection Law

South Korean authorities tracked suspects for months after CatFi case was initially dismissed regardless of early blockchain sleuth studies and proof.

South Korean prosecutors have filed expenses in opposition to a bunch of people linked to a Solana-based meme coin venture referred to as CatFi, following allegations that the token was utilized in a coordinated rugpull scheme after attracting investor funds.

The Seoul Southern District Prosecutors’ Workplace confirmed in its Wednesday assertion that 5 people are actually going through expenses in reference to the case, together with two essential suspects who’ve been positioned in custody and three others who’ve been indicted with out detention.

Influencer Ruse, Faux Lockups

Investigators say the group created and launched CatFi in early 2025 via the Solana meme coin platform Pump.enjoyable. It managed to attract in buyers quickly after itemizing, solely to desert the venture as soon as sufficient cash had entered the token. Prosecutors highlighted that the case is legally important as a result of it’s the first time the nation’s Digital Asset Consumer Safety Act has been used to prosecute a rug pull underneath fraudulent and unfair buying and selling provisions. Apparently, it’s also the primary recognized prosecution involving a crypto crime carried out via a decentralized change, which had beforehand remained largely exterior regulatory attain.

Based on the findings, the suspects didn’t rely solely on token mechanics to generate curiosity however allegedly constructed a deceptive promotional ecosystem across the venture. One of many accused reportedly offered himself on-line as an impartial crypto influencer, utilizing that id to push funding curiosity towards CatFi. In the meantime, one other dealt with official venture communications, the place follower numbers have been artificially inflated, and bulletins have been posted claiming pretend token lock-up preparations meant to recommend stability.

Authorities additional allege that the group circulated tokens throughout a number of wallets and carried out wash buying and selling exercise to disguise their management over provide and to create the looks of real market demand. Within the hours following launch, CatFi’s worth reportedly surged dramatically, rising by roughly 1,001 occasions inside a 26-hour window, throughout which about 6,000 buyers purchased into the token.

Prosecutors stated that 256 of those buyers later reported whole losses amounting to round 900 million Korean received, which is roughly equal to $600,000, whereas the suspects are believed to have secured earnings exceeding 400 million received. The scheme had initially drawn consideration from on-line blockchain analysts who traced pockets exercise and publicly recognized these concerned, however police on the time closed the case after the suspects claimed that they had been victims of hacking.

The matter was later escalated when the Monetary Providers Fee referred it to prosecutors, which finally led to a joint investigation involving a devoted crypto crime unit in addition to monetary and tax authorities, that tracked down the suspects, together with one particular person who had evaded seize for 3 months utilizing disguises.

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Arrests adopted on Might 11 for 2 suspects, whereas the remaining three have been detained in a while Wednesday.

Excessive Consumer Exercise Regardless of Allegations

Pump.enjoyable has come underneath intense scrutiny for enabling large-scale speculative token exercise on Solana, the place most newly created meme cash are linked to scams like rug pulls and pump-and-dump schemes. The platform’s ease of token creation and low transaction prices drove speedy buying and selling.

Regardless of this, the meme coin launchpad emerged as one of many Solana ecosystem’s prime revenue-generating functions in 2025. In truth, it was considered one of seven Solana apps that earned over $100 million in income through the 12 months.