Crypto rug pull scams: how they work and what to do
A rug pull is when the people behind a crypto token, DeFi project, or NFT collection hype it up, take investors' money, then abandon it — draining the funds and leaving the token worthless.
If this happened to you, it is not your fault. Rug pulls are engineered to look like the next big thing right up until the moment they collapse. Here's how they work — and what to do now.
What is a rug pull?
It's an exit scam built around a crypto project. The team launches a token or platform, drives hype and investment, then "pulls the rug": they remove the liquidity, dump their own holdings, or simply disappear with the funds. The token's value crashes to near zero, and investors are left holding something worthless.
How the scam unfolds
- 1.The hype. Heavy marketing, influencer shills, a slick site, and promises of huge or "guaranteed" returns build FOMO.
- 2.The buy-in. You buy the token or deposit into the project; the price often pumps fast as others pile in.
- 3.The pull. The team removes liquidity, dumps their tokens, or disables selling for everyone but themselves.
- 4.The vanish. Price collapses to near zero, the website and socials go dark, and the team disappears.
Warning signs
- 🚩An anonymous team with no verifiable track record.
- 🚩Guaranteed returns or unrealistically high APYs.
- 🚩You can buy the token but can't sell it (a "honeypot").
- 🚩Liquidity isn't locked, or the team holds a huge share of the supply.
- 🚩No independent security audit; heavy FOMO and "buy now" pressure.
If it just happened — do this first
- •Stop buying. "Averaging down" on a rug pull just sends more money to the scammers.
- •Record the token contract address and your transaction hashes from a block explorer — you'll need these for reports.
- •Revoke token approvals at revoke.cash so the contract can't pull more from your wallet.
- •Screenshot the project site, socials, and any promises before they're deleted.
How to report it
- •Your local police — file an official report and keep the reference number.
- •Your national fraud body (see the full reporting directory).
- •Report the token contract and wallet addresses on Chainabuse.
- •Report the project's social accounts to the platforms hosting them.
⚠️ Beware the second scam
"Recovery experts" may contact you promising to get your money back for a fee. The majority are scammers targeting victims a second time. Never pay anyone who guarantees recovery or asks for an upfront fee. Read the red flags →
You're not alone
Even experienced crypto users get caught by well-disguised rug pulls — the whole scheme is designed to look legitimate until the last moment. Reach out to someone you trust and consider a moderated victim community for support.
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