What are the warning signs of Rug Pull Scam?

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.

How do I protect myself from Rug Pull Scam?

Research the team — do they have verifiable identities?. Check if the contract is audited by reputable firms. Verify liquidity is locked for extended period.

What should I do if I'm a victim of Rug Pull Scam?

Document everything — contract address, transactions, communications. Report to FBI IC3 at ic3.gov. Report to FTC at ReportFraud.ftc.gov.

CRITICAL THREAT

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.

Losses: $3.1 billion in rug pulls (Chainalysis 2024)

Targets: Crypto investors, NFT collectors, DeFi users

Updated: 2026-01-06

Also known as: Exit Scam • Crypto Rug Pull • NFT Rug Pull • Token Scam

1How It 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

How Scammers Make Contact

Twitter/XDiscordTelegramCrypto forums

2Warning Signs & Red Flags

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

3Real-World Example

"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

4How to Protect Yourself

Research the team — do they have verifiable identities?
Check if the contract is audited by reputable firms
Verify liquidity is locked for extended period
Read the smart contract code if you can
Be wary of heavy influencer promotion
Don't invest more than you can afford to lose
Use tools like Token Sniffer to check contracts
If it sounds too good to be true, it is

5What 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

Report This Scam

FTC Report Fraud FBI IC3 Identity Theft

?Frequently Asked Questions

What is 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. 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:** -...

How common is this type of scam?

Rug Pull Scam is classified as a critical risk threat. Reported losses: $3.1 billion in rug pulls (Chainalysis 2024). This primarily targets Crypto investors, NFT collectors, DeFi users.

Can I get my money back?

Recovery depends on how you paid. Credit card payments may be reversed through chargebacks. Wire transfers and cryptocurrency are rarely recoverable. Report immediately to your bank and file complaints with the FTC at reportfraud.ftc.gov and FBI IC3 at ic3.gov.

How do I report this?

Report to the FTC at reportfraud.ftc.gov. For internet crimes, file with FBI IC3 at ic3.gov. For identity theft, visit identitytheft.gov. Also contact your local police and your bank.

Sources & References

Chainalysis: Rug Pulls FTC: NFT and Crypto Scams

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