Rug Pull
Scam where project creators flee with investor funds.
A rug pull is a scam in the crypto space where project founders (usually of a DeFi protocol, meme coin, or NFT collection) suddenly withdraw all liquidity and disappear with investor funds.
How it happens: 1. Team creates a token and adds liquidity to a DEX 2. Marketing attracts investors, price rises 3. Team sells all tokens or withdraws liquidity 4. Price drops to zero, investors lose everything
Warning signs:
•Anonymous team without verifiable history
•No smart contract audit
•Liquidity not locked
•Excessive hype without substance
•Unrealistically high APY yields
Famous rug pull: Squid Game token (2021) — dropped 99.99% in minutes.