South Korea Makes First Arrest Tied to Memecoin Rug Pull: report

South Korean prosecutors charged a group in an alleged rug pull involving the Solana-based memecoin Catpie, or CATFI, in what local media described as the country’s first decentralized exchange (DEX) rug-pull prosecution.

The group was reportedly apprehended by the Seoul Southern District Prosecutors’ Office’s Virtual Asset Crime Joint Investigation Division. The main suspect, surnamed Park, allegedly posed as “Eth Father” on social media platforms and falsely promoted CATFI as an independent third-party before executing a rug pull that caused about 900 million won ($599,000) in financial damage to at least 256 investors, local news outlet Digital Asset Works said Wednesday.

Prosecutors allege the group promoted CATFI on social media, drove the token’s price up more than 1,000-fold within 26 hours and then sold their holdings for about 400 million won ($260,000) in illegal profit.

The move marks South Korea’s first arrest tied to a memecoin rug pull under the Virtual Asset User Protection Act and signals that authorities are taking steps against coordinated crypto price manipulation. 

Rug pulls are deceptive exit scams where the token deployers promote a project to attract outside investment before suddenly abandoning it and selling their funds, causing significant financial losses to later buyers.

Cointelegraph reached out to the Supreme Prosecutors’ Office for comment but had not received a response by publication.

KOSPI trading volume versus volume on won-based domestic South Korean exchanges. Source: Digital Asset Works

The development comes amid a significant contraction of South Korea’s domestic digital asset trading market, which saw trading volume on major won-based cryptocurrency exchanges decline to just 8% of the KOSPI stock market’s trading volume, Digital Asset Works reported earlier on Wednesday.

Related: Bubblemaps flags MYSTERY token over 90-wallet launch sniping cluster

CATFI token crashes 99% after rug pull

Following its initial surge to an $8.99 million market capitalization in February 2025, the CATFI token has since crashed by 99% to an $57,000 market capitalization at the time of writing.

Despite the crash, 1,512 investors were still holding the token in hopes of recovery, with the largest holder, wallet “5Q54,” holding 18% of the token’s total supply, data from Pump.fun shows.

The X account that previously promoted the project has since been deleted.

CATFI/USD, all-time chart. Source: Pump/fun

Rug pulls and coordinated manipulation attempts continue threatening the wider cryptocurrency space.

Earlier in May, a Solana memecoin linked to Keith Gill’s Roaring Kitty X account suffered a similar rug pull, as the anonymous developer cashed out about $729,000 while the token lost most of its value, Cointelegraph reported.

One unfortunate cryptocurrency trader lost nearly $190,000 on the memecoin within an hour, underscoring the risks of memecoin trading.
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