South Korea takes action for the first time under the Virtual Asset User Protection Act in a DEX fraud case involving the CATFI project

On May 27th, according to Crypto.news, the Joint Investigation Division for Virtual Asset Crimes at the Seoul Southern District Prosecutors' Office in South Korea arrested and indicted two main culprits suspected of market manipulation in connection with the Solana Meme coin CATFI. Another individual was indicted without detention, and two others were indicted for aiding the main culprits in their escape. This marks the first arrest and indictment in South Korea under the "Virtual Asset User Protection Act" for a "Rug Pull" scam on a decentralized exchange (DEX). Prosecutors stated that the main culprit, Park, impersonated the influencer "Eth Father" on the X platform, recommending investors buy CATFI as an unrelated third party, while simultaneously managing the project's social media accounts, manipulating follower counts, and disseminating false positive news. The group also distributed CATFI across multiple wallets and concealed the fact that the issuer controlled the tokens through wash trading. CATFI's price surged 1001 times within 26 hours of its issuance, with approximately 6,000 investors buying in. Subsequently, 256 investors lost about 90 million Korean Won (approximately $586,000). The criminal group used approximately 10 million Korean Won in funds to profit around 400 million Korean Won (approximately $260,000).