South Korean prosecutors have charged multiple individuals behind a Solana-based memecoin project named CatFi. 

According to a Wednesday official release, the Seoul Southern District Prosecutors' Office has filed charges against two main suspects who were taken in custody, along with three others who were not detained. 

The suspects allegedly launched CatFi on Solana memecoin launchpad Pump.fun in early 2025, and abandoned the project shortly after investors injected significant capital into the token — an act commonly known as a rugpull.

"This marks the first time that the 'Virtual Asset User Protection Act' has been applied to penalize a rugpull scheme — a pervasive crime in the crypto market — under fraudulent and unfair trading regulations," the translated release said. "It's also the first legal prosecution of a crypto crime executed through a DEX, which has been in a regulatory blind spot."

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Fake influencers

After launching the meme token, the suspects allegedly lured investors into buying CatFi by promoting it through fake social media channels.

A primary suspect posed as an independent crypto market influencer to urge investors to buy CatFi. Meanwhile, another key suspect managed the memecoin's official channel, artificially inflating follower counts and posting announcements of false lock-up plans to drive traction.

The group then allegedly used multiple wallets to distribute tokens and conducted wash trading to conceal their control over the supply.

The prosecutors said the cryptocurrency's value rose 1,001-fold in 26 hours after the launch, when around 6,000 investors purchased. Out of that number, 256 investors reported a combined loss of 900 million Korean won ($600,000). The suspects, on the other hand, allegedly made over 400 million won worth of profits, the release said. 

Although online sleuths previously identified the suspects and their wallet addresses and reported them to the authorities, police closed the case without resolution after the suspects claimed they had been hacked, the prosecutors said.

After the Financial Services Commission referred the case to prosecutors, its Virtual Asset Crime Joint Investigation Unit worked with relevant financial and tax authorities to track down the suspects — one of whom had been on the run for three months while using multiple disguises.

Authorities arrested two suspects on May 11 and the remaining three on Wednesday, according to the release.

"The prosecution remains committed to instilling a firm realization among those seeking overnight wealth through illicit methods in the virtual asset market that market manipulation will inevitably lead to total financial and personal ruin," the prosecutors said in the release.