Opening
South Korean prosecutors have indicted Park Mo and associates for fraudulent trading involving the Solana-based memcoin CATFI, marking the first case prosecuted under the Digital Asset User Protection Act for fraudulent trading charges and the first arrest in a decentralized exchange (DEX) rug pull case. The group launched CATFI in early 2025 via the pump.fun platform and subsequently executed a rug pull on a DEX, obtaining approximately 400 million won in illicit gains from an initial investment of 10 million won. The Seoul Southern District Prosecutor's Office Virtual Asset Crime Joint Investigation Division, headed by Chief Prosecutor Kim Yong-je, announced the charges on the 27th, marking a significant legal precedent in cryptocurrency enforcement.
The perpetrators employed deceptive tactics including false social media promotions, inflated follower counts, and misleading announcements to lure investors. Park Mo, operating under the influencer alias "EtherFather," posed as an unaffiliated third party recommending the coin's purchase while concealing his involvement in the project. The scheme resulted in 256 investors suffering losses totaling 900 million won, despite approximately 6,000 total purchasers. CATFI experienced a price surge of 1001 times within 26 hours of launch before the rug pull occurred.
Case Details and Charges
The prosecution stated that the defendants' actions constitute "the use of fraudulent means, plans, or schemes" and "false statements or representations regarding material matters" in relation to digital asset trading—both prohibited under the Digital Asset User Protection Act. The perpetrators executed the scheme by establishing and managing project SNS accounts, manipulating follower counts, and posting false promotional announcements. To conceal their control of the asset and their rug pull plans, they dispersed coins across multiple wallets and conducted circular transactions.
Two defendants were arrested and indicted on market manipulation charges, one was indicted without arrest, and two additional defendants were indicted without arrest for obstruction of justice related to assisting the main perpetrator's flight.
Legal Precedent
This case represents the first prosecution under the Digital Asset User Protection Act for fraudulent trading charges specifically—prior enforcement cases applied market manipulation statutes. Additionally, this is the first case addressing fraudulent conduct on a decentralized exchange. The initial Digital Asset User Protection Act case involved centralized exchange trading.
Context: Memcoin Platform Activity
Pump.fun is a Solana-based platform enabling digital asset issuance and has become the primary platform for memcoin launches. Early 2025 saw significant growth in Solana-based memcoin issuance, contributing to the platform's increased popularity. Memcoins, combining the term "meme" with "coin," can be issued by any user, making them susceptible to fraud schemes.
Prosecution Statement
The Seoul Southern District Prosecutor's Office stated: "Based on legal expertise in the digital asset crime field, we will respond firmly to acts that disrupt the digital asset market and damage public trust."
