South Korea Makes First Arrest in Memecoin Rug Pull: Report
South Korean prosecutors have indicted a group involved in Solana-based memecoin Catpie, or CATFI, in what local media have described as the country's first decentralized exchange (DEX) remote pool case.
The group was reportedly arrested by the Seoul Southern District Prosecutor's Office's Virtual Property Crime Joint Investigation Unit. The main suspect, surnamed Park, claimed to be “Eth Father” on social media platforms and misrepresented CATFI as an independent third party, before pulling the rug out from a minimum of 256 investors worth $900 million ($599,000), local news outlet Digital Asset Works reported on Wednesday.
Prosecutors accused the group of promoting CATFI on social media and illegally selling their holdings to 400 million won ($260,000), raising the token's price more than 1,000 times in 26 hours.
The move marks South Korea's first arrest under the Virtual Property User Protection Act, tied to the memecoin carpet, and signals that authorities are cracking down on organized crypto price manipulation.
Rug pulls are deceptive exit scams in which token issuers promote a project to attract foreign investment before suddenly abandoning and selling their funds, causing huge financial losses to buyers later.
Cointelegraph reached out to the Attorney General's Office for comment but did not receive a response for publication.
KOSPI trading volume on South Korean exchanges based on winnings. Source: Digital Asset Works
The development comes amid a significant slowdown in South Korea's domestic digital asset trading market, with trading volume on major won-based cryptocurrency exchanges down 8% from the KOSPI stock market trading volume, Digital Asset Operations reported earlier on Wednesday.
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CATFI token will fail 99% after rogue pull
After growing to a market capitalization of $8.99 million in February 2025, CATFI token fell by 99% to a market capitalization of $57,000.
Despite the crash, 1,512 investors still held the token in hopes of recovery, the largest holding, wallet “5Q54”, holds 18% of the total supply, according to data from Pump.fun.
The X account that previously promoted the project has since been deleted.
CATFI/USD, all time chart. Source: Pump/Entertainment
Carpet pulling and coordinated scam attempts continue to threaten the broader cryptocurrency space.
Earlier in May, Solana's memecoin, linked to Keith Gill's Roaring Kitty X account, suffered similar far-reaching traction, with the anonymous developer withdrawing about $729,000, causing the token to lose most of its value, Cointelegraph reported.
One unlucky cryptocurrency trader lost nearly $190,000 on memecoin in one hour, highlighting the dangers of memecoin trading. Magazine: Bitcoiners eye ‘May sell', SBF closes bid for new trial: Hodler's Digest, April 26 – May 2
