Cryptocurrency Scams
Rug Pull Scam
Developers create a new cryptocurrency or NFT project, hype it up, attract investment, then abandon the project and disappear with investor funds.
Reported Losses
$3.1 billion in rug pulls (Chainalysis 2024)
Primary Targets
Crypto investors, NFT collectors, DeFi users
Last Updated
2026-01-06
Also Known As
Exit Scam
How Scammers Contact You
How This Scam Works
A rug pull happens when crypto/NFT developers abandon a project and run away with funds.
**Types of rug pulls:**
**Hard Rug Pull:** - Developers code malicious smart contracts - Investors can buy but can't sell (honeypot) - Or developers can drain the liquidity pool instantly
**Soft Rug Pull:** - Developers dump their holdings crashing the price - Gradually abandon the project - Stop development after raising money
**The pattern:** 1. Create hype through influencers, social media, promises 2. Launch token or NFT with compelling roadmap 3. Price rises as people buy in 4. Developers sell all their holdings or drain liquidity 5. Price crashes to zero 6. Developers disappear
Red Flags to Watch For
- ⚠️Anonymous team with no verifiable identities
- ⚠️No audit of smart contract code
- ⚠️Unrealistic promises and roadmap
- ⚠️Heavy influencer promotion with paid shills
- ⚠️Low liquidity that can be pulled
- ⚠️Locked liquidity that unlocks soon
- ⚠️Code that prevents selling or has hidden functions
- ⚠️Team holds large percentage of tokens
📝 Real Victim Account
"The 'Squid Game' token went viral in 2021. It shot up 45,000% in days. People couldn't sell because of the honeypot code. Then developers drained $3.4 million in 5 minutes. The token went from $2,861 to essentially zero instantly."
— CoinDesk Investigation
How to Protect Yourself
- 1Research the team — do they have verifiable identities?
- 2Check if the contract is audited by reputable firms
- 3Verify liquidity is locked for extended period
- 4Read the smart contract code if you can
- 5Be wary of heavy influencer promotion
- 6Don't invest more than you can afford to lose
- 7Use tools like Token Sniffer to check contracts
- 8If it sounds too good to be true, it is
🆘 What to Do If You're a Victim
- 1Document everything — contract address, transactions, communications
- 2Report to FBI IC3 at ic3.gov
- 3Report to FTC at ReportFraud.ftc.gov
- 4Report the project on crypto scam databases
- 5Share warnings in crypto communities
- 6Recovery is rare but some legal actions have succeeded
🔗 Related Scams
📚 Sources & References
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