South Korea Arrests CatFi Suspects in First Rugpull Case

South Korean prosecutors and police this month arrested several people they allege operated the CatFi memecoin, marking the first criminal rugpull case prosecuted under the nation's updated cryptocurrency law.

Prosecutors allege the token launched on the Solana blockchain and that organizers removed liquidity from CatFi's pool soon after launch, causing prices to collapse and leaving many retail holders unable to trade.

Investigators traced token transfers and liquidity withdrawals on Solana and linked on-chain wallet activity to real-world identities by combining blockchain analysis with traditional financial records, including exchange transaction data and bank account information.

Prosecutors say the suspects rapidly converted pooled funds to other tokens and fiat, then dispersed proceeds across multiple accounts and platforms. Officials identified several individuals described as developers and promoters connected to the project.

Charges are being prepared under provisions of the updated law that cover digital asset fraud and misappropriation of investor funds. The statute provides for criminal fines and possible prison terms; authorities have not publicly detailed the specific counts.

The investigation involved cybercrime units, prosecutors and financial regulators working together to follow transaction trails, subpoena exchange records and trace converted funds into centralized platforms and bank accounts. The probe remains active as authorities continue to trace proceeds and identify additional participants.