Seoul charges CATFI operators over Solana DEX collapse in test of virtual-asset rules

South Korean prosecutors have charged operators of the CATFI meme token in what authorities describe as the country’s first decentralized-exchange (DEX) rug pull prosecution. The action follows a rapid Solana-based CATFI price spike and collapse that prosecutors say generated about $260,000 in illegal gains and left investors with losses estimated at 900 million won on DEX platforms. Arrests were made targeting members of an alleged criminal group connected to the scheme ^{[1] [2] [3] [4] [5]}.

Prosecutors allege the operators used deceptive marketing, multi‑wallet manipulation, circular trading and other DEX tactics to inflate CATFI’s price before cashing out, with most activity occurring on Solana-based decentralized platforms, according to charging documents and reporting. The case underscores challenges for regulators and the need for enhanced blockchain forensics to trace complex on‑chain activity and better protect retail investors in decentralized finance ^{[2] [1] [4] [5]}.

Authorities and industry observers say the prosecution will serve as a test case for applying existing virtual asset laws to decentralized trading and may shape future enforcement and oversight of DEX-based fraud ^{[2] [4]}.