Rug Pull
A scam where a crypto project’s creators suddenly drain funds, abandon the project, or make a token impossible to sell.
A rug pull is a type of crypto scam in which the people behind a token, NFT project, DeFi app, or liquidity pool attract users and money, then abruptly take value out of the project and disappear or stop supporting it. The name comes from the phrase “pulling the rug out,” because holders are left with assets that may be worthless or hard to sell. Rug pulls are most common in newer, lightly audited projects where the team controls key wallets, smart contract permissions, or a large share of the token supply.
Rug pulls matter because they can happen quickly and may look legitimate at first, with polished websites, active social media, and promises of high rewards. For example, a team might launch a token, encourage users to trade it, then remove the trading pair’s liquidity so buyers cannot sell at a fair price. In another version, hidden smart contract code may block sales or allow insiders to mint unlimited tokens. Checking audits, liquidity locks, team transparency, and contract permissions can help users understand risk, but cannot remove it entirely.
Other terms in Wallets & Security
Address Poisoning
A wallet scam where attackers plant lookalike addresses in your transaction history so you might copy the wrong recipient later.
Approval Phishing
A scam that tricks users into granting a malicious wallet or smart contract permission to spend tokens from their wallet.
BIP-39
A standard for turning wallet backup data into a human-readable seed phrase, usually 12 or 24 words.
Crypto Wallet
A tool that stores and manages the private keys needed to access and use cryptocurrency on a blockchain.