South Korea Charges CatFi Rugpull Under Virtual Asset Investor Protection Law

South Korea prosecutors have filed charges over the CatFi rugpull, calling it the first crypto fraud case using the Virtual Asset User Protection Act to target fraudulent and unfair trading. The Seoul Southern District Prosecutors’ Office said five people were charged. Two key suspects were detained, while three others were indicted without detention. Prosecutors allege the CatFi rugpull was launched on Solana via Pump.fun in early 2025, used to attract buyers after listing, and then abandoned once funds reached a target level. Authorities claim the scheme relied on a misleading promotion setup rather than only token mechanics. An accused person allegedly posed as an “independent crypto influencer” to push CatFi buys, while another handled official project messaging, including inflated follower counts and “fake token lockup” announcements to imply stability. Prosecutors also cite on-chain manipulation, including distribution across multiple wallets and wash trading to conceal control of the supply. After launch, CatFi’s price reportedly surged about 1,001x in 26 hours, with around 6,000 investors buying. Prosecutors say 256 investors reported losses of roughly 900 million KRW (~$600k), while the suspects allegedly earned over 400 million KRW. For traders, the CatFi rugpull case is a reminder that regulatory enforcement can trigger short-term volatility spikes, but it also reinforces the high-risk profile of Solana meme-coin liquidity cycles. The latest details about influencer-style promotion and wash trading may increase skepticism and reduce follow-through buying after similar launches.