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South Korea Charges Group in First DEX Rug Pull Prosecution

South Korea Charges Group in First DEX Rug Pull Prosecution

According to Seoul Southern District prosecutors, the CATFI case is South Korea’s first use of the Virtual Asset User Protection Act against a rug pull and the first prosecution of a crypto crime carried out through a DEX.

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Fact Check
The claim is corroborated by three independent crypto-news outlets reporting on the same May 27, 2026 announcement by the Seoul Southern District Prosecutors' Office. PANews provides specific prosecutorial details (charges under the Virtual Asset User Protection Act, two main suspects indicted with detention, the 256 affected investors, the 1,001-fold price surge in 26 hours), which align with crypto.news's English summary and CryptoBriefing's account. While I could not directly access the Korean prosecutors' office page, the consistency across outlets attributing details to the prosecutors makes the claim highly likely true.
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Summary

South Korean prosecutors said they have charged five people tied to the Solana-based memecoin CATFI, including two suspects taken into custody and three others who were not detained. According to the Seoul Southern District Prosecutors' Office, the group launched CATFI on Pump.fun in early 2025, promoted it through fake social media accounts and false lock-up announcements, distributed tokens across multiple wallets, and used wash trading to hide control of supply before abandoning the project in an alleged rug pull. Prosecutors said the token’s value rose 1,001-fold within 26 hours and drew about 6,000 buyers. They said 256 investors reported combined losses of about 900 million won, or roughly $600,000, while the suspects allegedly made more than 400 million won in profits. Authorities described the case as the first application of South Korea’s Virtual Asset User Protection Act to punish a rug pull under fraudulent and unfair trading rules, and the first legal prosecution of a crypto crime executed through a DEX.

Terms & Concepts
  • DEX: A decentralized exchange where users trade tokens directly on blockchain infrastructure without a centralized intermediary.
  • Rug pull: A crypto scam in which project operators attract funds and then abandon the project or remove support, causing investor losses.
  • Wash trading: A form of market manipulation in which the same party effectively trades with itself to create misleading activity or price signals.