Solana Memecoin Vanishes 900 Million Won After Attracting 6,000 People...First Criminal Indictment for DEX Fraud

▲ Solana (SOL), Memecoin, Cryptocurrency Crime, Rugpull/AI Generated Image

The Solana (SOL)-based memecoin CATFI saw its price collapse after skyrocketing 1,001 times in just 26 hours after its launch, attracting approximately 6,000 investors. In response, prosecutors have launched the first-ever criminal indictment in a decentralized exchange (DEX) rugpull case.

According to Bitcoinist on May 27 (local time), the Seoul Southern District Prosecutors' Office's Joint Investigation Team for Virtual Asset Crimes referred five suspects to trial in the nation's first criminal case involving a decentralized exchange rugpull. Prosecutors indicted two main perpetrators with detention and one without detention, and separately indicted two others for aiding the escape of the main perpetrators. This case marks the first application of charges for fraudulent unfair trading under Korea's Virtual Asset User Protection Act.

At the center of the incident was CATFI, a Solana-based memecoin issued on pump.fun. The group spent millions of won to issue the token and list it on a decentralized exchange, then posed as third parties unrelated to the project, encouraging investors to buy. The main perpetrator was reportedly active on social media under the influencer name EtherFather.

According to prosecutors, they also directly operated the project's official social media accounts, artificially inflating follower counts and posting false promotional announcements. To conceal their control over the token supply, they divided their holdings across multiple wallets and conducted circular trades to make it appear like natural market activity. After individual investors were drawn in, the group abandoned the project and allegedly pocketed illegal profits of approximately 400 million won. The initial investment was about 10 million won.

The scale of the damage was also significant. The price of CATFI surged 1,001 times within 26 hours of its launch, and approximately 6,000 people participated in the investment. Among them, the confirmed damage amount for 256 victims was estimated at approximately 900 million won. Bitcoinist reported that this case highlights simultaneous issues of market manipulation on decentralized exchanges, influencer-based false promotions, and concealment through wallet distribution.

This indictment is significant because it expands the scope of virtual asset regulation enforcement in Korea beyond centralized exchanges. While previous major cases related to the Virtual Asset User Protection Act focused on charges of market manipulation surrounding centralized exchange transactions, this case applied charges of fraudulent unfair trading to decentralized exchange transactions. Prosecutors identified the use of fraudulent means, plans, or techniques, or making false statements about important matters during digital asset transactions, as key to their legal judgment.

Meanwhile, through this case, investigative authorities have brought Solana-based memecoins, decentralized exchange transactions, influencer-type market manipulation, and wallet distribution concealment structures under their investigation net.

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