1 Introduction
A rug pull occurs when cryptocurrency developers or project founders abandon a project and abscond with investor funds. The term refers to "pulling the rug out" from under investors. It can take multiple forms: draining a liquidity pool, minting unlimited tokens, or simply disappearing with raised capital. Rug pulls accounted for over 35% of all crypto scam revenue in recent years.
$2.8B
Lost to rug pulls in 2021
99.9%
Typical token value collapse
<30 days
Average project lifespan
2 TVL & Liquidity Collapse Simulator
TVL Peak
$5M
TVL After
$0
Stolen
$0
Token Price
$1.00
Project Trust Score Checklist
Extreme Risk - Do not invest
3 Detailed Analysis
Types of Rug Pulls
Liquidity Drain
Developer removes all liquidity from a DEX pool, making the token unsellable. Instant and catastrophic.
Infinite Mint
Hidden mint function in the smart contract allows developers to create unlimited tokens and sell them.
Slow Rug
Gradual selling of developer tokens over weeks or months, avoiding detection until the project dies.
Red Flags
- Anonymous team with no verifiable track record
- Unlocked or short-lock liquidity (less than 6 months)
- Unaudited smart contracts with minting or pause functions
- Unrealistic APY or return promises (1000%+ yields)
- Developer wallets holding a disproportionate share of the token supply
Related Fraud Types
Pump & Dump
Coordinated buying to inflate a token price followed by a mass sell-off, leaving late investors with losses.
Wash Trading
Simultaneously buying and selling the same asset to generate misleading activity and inflate trading volume.
Mixing & Tumbling
Using services that pool and redistribute crypto assets to break the link between sender and receiver.
Source: FraudCodex - Educational Platform for Financial Crime
URL: https://fraudcodex.org/page/rug-pull
Page: Rug Pull - Market Abuse / Crypto & Digital Assets
Disclaimer: This content is for educational purposes only and does not constitute legal advice.