After Boosting Meme Coin and Making Off with Funds... 'Rug Pull Scheme' Fraud Ring Faces Trial

"First Criminal Prosecution of DEX-Based Virtual Asset Crime"

A group of market manipulators who earned illicit profits worth hundreds of millions of won through so-called 'rug pull' investment scams on decentralized exchanges (DEX) has been brought to trial.

The Virtual Asset Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (headed by Chief Prosecutor Kim Yong-je) announced on May 27, 2026, that it had indicted individuals A and B under arrest on charges of violating the Act on the Protection of Virtual Asset Users, and indicted individual C without detention. D and E, who assisted A’s escape by providing accommodation and acquiring a mobile phone under a borrowed name, were indicted without detention on charges of harboring a criminal.

Seoul Southern District Prosecutors' Office, Yangcheon-gu, Seoul. Photo by Jiye Lee

According to the prosecution, A and others conspired to commit a rug pull on a DEX-based meme coin platform called 'Pump.fun' by issuing coins and then luring investors with false positive news and price manipulation to gain illicit profits. A rug pull refers to a scheme in which the operators of a virtual asset project issue and promote a coin to attract capital from buyers, then suddenly sell off their holdings en masse to realize profits.

The main perpetrator, A, who is also an influencer, was found to have promoted the purchase of the coin on a social networking service (SNS) account with thousands of followers, pretending to be an unrelated third party. B was found to have managed the coin’s official SNS account, posted false announcements, and manipulated the number of followers.

C, who was indicted without detention, is alleged to have concealed the fact that the issuing group controlled the coin by distributing and recycling the token through multiple wallets.

The coin they issued skyrocketed in price by 1,001 times in approximately 26 hours. During this period, around 6,000 investors purchased the coin. To date, 256 investors have been confirmed to have suffered losses totaling up to 900 million won. In contrast, A and others are reported to have obtained about 400 million won in criminal proceeds in just 30 hours, starting from an initial fund of only 10 million won.

A fled and hid his identity when the prosecution’s investigation began, but was apprehended after about three months of pursuit.

The prosecution explained that this case marks the first time a DEX-based virtual asset crime, previously existing in a regulatory blind spot, has been subject to criminal prosecution. They also emphasized that the crime was uncovered through cooperation with the Financial Security Institute, Korea Deposit Insurance Corporation, National Tax Service, and the Financial Supervisory Service’s Virtual Asset Investigation Bureau, after the case had previously been closed unsolved during a police investigation.

A prosecution official stated, "This case clearly demonstrates the need for a consolidated government-wide effort to respond to increasingly sophisticated, intelligent, and organized crimes."

This content was produced with the assistance of AI translation services.