South Korea Charges CATFI Memecoin Operators in First DEX Rug-Pull Case

South Korea’s Virtual Asset User Protection Act, which took effect on July 19, 2024, made unfair trading practices subject to criminal penalties. However, the issuance and promotion of memecoins through decentralized exchanges, or DEXs, had long remained a regulatory blind spot. The Catpie (CATFI) case marks the first prosecution of an alleged DEX rug pull under the law and is an important test of whether the new rules can curb onchain fraud.

On May 27, 2026, the Seoul Southern District Prosecutors’ Office’s Joint Investigation Unit for Virtual Asset Crimes indicted five people linked to CATFI. Two were detained and three were indicted without detention. Prosecutors allege that the suspected ringleader, a man surnamed Park, posed as “Eth Father” to promote the token, driving its price up more than 1,000-fold in 26 hours before selling. He allegedly made about 400 million won in illegal profits, while 256 investors suffered losses of about 900 million won.