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Rug Pull Crypto Explained: Is It Illegal?
Jun 30, 2025
A rug pull in crypto is a deceptive maneuver where the creators of a cryptocurrency project suddenly abandon it and take all the investors’ money. The rug pull meaning refers to this sudden exit, which leaves investors with worthless tokens. The rug pull definition highlights it as a scam where project developers pull the “rug” out from under their investors after gaining their trust and funds. This matters a lot because it causes people to lose their money and makes it harder to trust new crypto projects.
This guide explains what a crypto rug pull is and the common types of rug pull scams. We’ve also explored how to detect rug pull crypto scams by checking project teams, liquidity, and smart contract codes.
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What Is a Rug Pull?
A rug pull scam in crypto is a type of fraud where developers of a new cryptocurrency project suddenly abandon it, taking all the investors’ money with them. This is like someone inviting you to invest in a brand-new, exciting project, promising huge returns, and then, after you’ve put your money in, they just vanish. The rug pull meaning points to this sudden and deceptive withdrawal.
Typically, these scams happen with new tokens on decentralized exchanges (DEXs) where anyone can list a coin without much oversight. The scam developers will create a new token, then they will promote it heavily on social media, and get a lot of people to buy it. It will drive up its price. They might even make it seem like a very legitimate project with a great responsive website and a token roadmap as well.
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