A rug pull is a common exit scam in the cryptocurrency industry where a team convinces investors to raise money for a publicly sold token with the intention to deceive and quietly shut down the whole project and disappear with all the funds. Once this happens, the tokens are worthless, and the investors become victims without any portion of the funds since they all were stolen. While rug pull scams aren’t a new thing, they still attract victims and are backed by hyped social media campaigns and huge influencers as a way to deceive investors and promise buyers “exclusive” digital assets.
Rug pulls often happen on decentralized exchanges (DEXs), where fraudsters use the platform’s increased anonymity to hide their identities and avoid detection. Rug pulls are also considered a complex crime because they are heavily orchestrated and well-thought-out, and to succeed, they need to build credibility, which often takes months of work and convincing, including certain finances for marketing or luring in investments.
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