Seoul Southern District Prosecutors' Office's Joint Investigation Department for Virtual Asset Crimes announced the arrest and indictment of two main suspects on charges of market manipulation, with one other person indicted without detention and two charged with aiding the principal's flight. The lead suspect, identified as Park, operated under the pseudonym "Eth Father" on Crypto Twitter. In early 2025, he created the CATFI token on Solana's Pump.Fun platform and executed a rug pull after listing on a decentralized exchange. This marks the first time in South Korean judicial history that 98% of tokens on Pump.Fun have been classified as rug pulls or scams.
26-Hour 1,001x Pump-and-Dump
Park promoted CATFI through fake positive news and purchased followers, using multiple wallets to distribute holdings and conduct wash trading to mask control. The token price surged 1,001x within 26 hours of launch, attracting about 6,000 buyers. After the principal dumped holdings, 256 investors lost approximately 900 million won ($586,000). Prosecutors said the group used around 10 million won ($6,500) in criminal funds to generate illegal gains of 400 million won — a 40x return.
Regulatory Stretch from CEX to DEX
This is the first enforcement action under the Virtual Asset User Protection Act, effective July 2024, targeting criminal activity on a DEX. Previously, in January 2025, South Korea handled its first centralized exchange price manipulation case under the same law. The prosecutors' reach now extends from CEX to DEX. They stated they will "firmly respond to acts that disrupt the digital asset market and undermine public trust." This case could set a key precedent for handling meme coin fraud, social media promotions, and DEX trading under Korean virtual asset law. The country has also tightened regulations recently, including requiring financial influencers to disclose holdings and paid promotions.