South Korean Prosecutors Bring First Case Under New Crypto Law Over Solana Memecoin CatFi Rug Pull

South Korean prosecutors have filed their first case under the Virtual Asset User Protection Act, targeting an alleged "rug pull" tied to CatFi, a Solana-based memecoin launched via Pump.fun, CoinDesk reported. The Seoul Southern District Prosecutors' Office said five people are accused of creating CatFi on the Solana token-launch platform in February 2025, then selling their holdings after a short-lived price spike, triggering a steep collapse that authorities described as a classic rug pull. Prosecutors said CatFi's market capitalization peaked at about $8.37 million before plunging to roughly $12,000 within hours. The case involves 256 investors who allegedly lost around 900 million won (about $600,000). The suspects are said to have made more than 400 million won (about $267,000) in profit. Two defendants accused of handling social media promotion have been arrested. Three others linked to technical operations and efforts to evade detection were charged without detention. Authorities said this marks the first time South Korea has applied the Virtual Asset User Protection Act to an alleged rug pull, and the first local prosecution of a crypto case tied to activity in a decentralized trading environment. Nick Vaiman, co-founder of blockchain analytics firm Bubblemaps, told overseas media the move signals clearer legal consequences for rug pulls that previously often remained limited to on-chain investigations with little accountability. After news of the case, CatFi drew short-term speculative inflows. Its market cap jumped from about $2,350 to around $167,000 in less than a day, a gain of nearly 6,000%, even as the token remained roughly 96% below its February 2025 peak. On-chain data indicates CatFi had seen almost no new buying activity since August 2025 before the surge. New CatFi accounts have also appeared on X, with operators saying they aim to "derug" the project. The case suggests South Korean regulators are explicitly bringing meme-coin issuance, social media promotion and on-chain selling into their enforcement scope. It also highlights how Solana memecoins can remain highly volatile even after legal risks become public, as speculative capital rotates in.