{"id":"rug-pull","title":"Rug Pull","content":"In the cryptocurrency industry, **a rug pull** refers to a type of scam where the developers of a project abandon it unexpectedly, taking investors' funds with them. This leaves investors holding worthless tokens that cannot be sold. Rug pulls are prevalent in the [decentralized finance](https://iq.wiki/wiki/defi) (DeFi) ecosystem, particularly on [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange) (DEXs) where listings are free and often unaudited. [\\[1\\]](#cite-id-6ZCk8dWb6YU4CNrI)​\n\n## Overview\n\nA rug pull is a crypto exit scam where developers create a token, promote it to attract investors, and then withdraw the project’s liquidity, crashing its value. [\\[2\\]](#cite-id-NWSfKWbUAOGShIwH)​\n\nDuring a rug pull, developers often sell their own tokens for significant returns, leaving investors unable to sell their tokens due to a lack of liquidity in the pool. Adding to this, they might code the contract to prevent buyers from selling, or use tactics such as fake hype and celebrity endorsements to create FOMO (fear of missing out) among potential investors. [\\[3\\] ](#cite-id-YL7yjKhXl64Mle1T)​\n\nKey indicators of potential rug pulls include unlocked liquidity pools, disproportionately large token holdings by the team or a few wallets, lack of audit records, sudden spikes in token value, anonymous teams, and unrealistic promises of returns. [\\[1\\]](#cite-id-6ZCk8dWb6YU4CNrI)​\n\n## Types / Taxonomy\n\n### Rug Pull\n\nOccurs when developers withdraw all pooled assets from a decentralized exchange (DEX), making the token untradable. [\\[2\\]](#cite-id-NWSfKWbUAOGShIwH)\n\n### Exit Scam\n\nThis involves the sudden disappearance of project operators with funds, often occurring in larger ICOs (Initial Coin Offerings). [\\[4\\]](#cite-id-ZQZn8R6DyEwJwurt)\n\n### Soft Rug\n\nHere the developers cause token devaluation through strategic token sales or transfers that apply sell pressure without outright draining the liquidity pool. [\\[1\\]](#cite-id-6ZCk8dWb6YU4CNrI)\n\n## Prevention and Mitigations\n\nInvestors can mitigate rug pull risks by performing due diligence:\n\n* **Liquidity Locking:** Ensuring liquidity is locked for a specified period reduces rug pull chances.\n* **Conducting Audits:** Participating projects should undergo thorough audits by reputable firms.\n* **Using Multisig wallets:** Multisignature wallets in project operations ensure no individual can misuse funds.\n* **Ensuring Tokenomics Hygiene:** Reviewing token distribution and supply carefully. [\\[1\\]](#cite-id-6ZCk8dWb6YU4CNrI)","summary":"Rug pull: a crypto scam where project operators remove liquidity or disappear with funds; covers mechanics, taxonomy, detection, prevention, legal responses, notable incidents, and research.","images":[{"id":"QmU5tx6dpMmgPjtupEHGUSBP8ki5L79BsvbDApUAEtbY4F","type":"image/jpeg, image/png"}],"categories":[{"id":"glossary","title":"glossary"}],"tags":[{"id":"DeFi"},{"id":"Token"},{"id":"NFT"}],"media":[{"id":"Qme1x54cNd5CUQ6jSwDgzJUUKeieyxFTJVXT6DnxDNMKiR","size":"0.020","name":"Apa-Itu-Rug-Pull-Crypto.webp","type":null,"source":"IPFS_IMG"},{"id":"QmRLh9MdXTsxPc8Ji2gG1416ysouAsy5krywEQfyScTwtQ","size":"1.340","name":"Avoid-Rug-Pull.png","type":null,"source":"IPFS_IMG"},{"id":"QmPcRkxFPCgNdzb4cr47MwiA4oWwUBxy6BqqAGfr9uNJYc","size":"0.034","name":"Crypto-Rug-Pull-740x492.jpg","type":null,"source":"IPFS_IMG"}],"metadata":[{"id":"references","value":"[{\"id\":\"6ZCk8dWb6YU4CNrI\",\"url\":\"https://www.coingecko.com/learn/rug-pull\",\"description\":\"CoinGecko\",\"timestamp\":1780497516589},{\"id\":\"NWSfKWbUAOGShIwH\",\"url\":\"https://coinmarketcap.com/academy/article/what-is-a-rug-pull-in-crypto\",\"description\":\"CoinMarketCap: Article\",\"timestamp\":1780497516589},{\"id\":\"YL7yjKhXl64Mle1T\",\"url\":\"https://www.ledger.com/academy/glossary/rug-pull\",\"description\":\"Ledger\",\"timestamp\":1780497516589},{\"id\":\"ZQZn8R6DyEwJwurt\",\"url\":\"https://coinmarketcap.com/academy/glossary/rug-pull\",\"description\":\"CoinMarketCap: Glossary\",\"timestamp\":1780497516589}]"},{"id":"previous_cid","value":"\"https://ipfs.everipedia.org/ipfs/QmQErHTuQLJVFHNnAoGqyiJEDUMdJthtW1hosMH1zwY4i1\""},{"id":"commit-message","value":"\"Removed rug pull definition, examples and trivia\""},{"id":"previous_cid","value":"QmQErHTuQLJVFHNnAoGqyiJEDUMdJthtW1hosMH1zwY4i1"}],"events":[],"user":{"id":"0x8af7a19a26d8fbc48defb35aefb15ec8c407f889"},"author":{"id":"0x7da121Af2c3Fc2e65eDCD3573a403C352B4538Aa"},"operator":{"id":"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138"},"language":"en","version":1,"linkedWikis":{"blockchains":[],"founders":[],"speakers":[]},"recentActivity":"{\"items\":[{\"id\":\"de27779f-cde4-443c-8a70-45aa4f337dd6\",\"title\":\"Rug Pull\",\"description\":\"In the cryptocurrency industry a rug pull refers to when a project disappears or \\\"exit scams\\\" with all users' funds...\",\"timestamp\":\"2026-06-03T14:31:34.228Z\",\"category\":\"glossary\",\"status\":{\"icon\":\"RiGlobalLine\",\"label\":\"Wiki Updated\",\"iconClassName\":\"text-green-500\"},\"user\":{\"name\":\"0x7da121Af2c3Fc2e65eDCD3573a403C352B4538Aa\",\"address\":\"0x1E23b34d3106F0C1c74D17f2Cd0F65cdb039b138\"},\"button\":{\"label\":\"View Summary\",\"icon\":\"RiFileTextLine\"},\"summarySections\":[{\"title\":\"Linked Wikis\",\"subtitle\":\"Replaced/updated entries in the linked-wikis list.\",\"variant\":\"modified\",\"changeCount\":2,\"changes\":[\"Removed linked wiki with id \\\"defi\\\" and title \\\"Decentralized Finance\\\".\",\"Added linked wiki with id \\\"glossary\\\" and title \\\"glossary\\\".\"]},{\"title\":\"Events\",\"subtitle\":\"Events field was added to the wiki as an empty array.\",\"variant\":\"added\",\"changeCount\":1,\"changes\":[\"Added \\\"events\\\" field set to an empty array: []\"]},{\"title\":\"Tags\",\"subtitle\":\"Tags were changed: a tag was removed and the tags array was cleared.\",\"variant\":\"modified\",\"changeCount\":2,\"changes\":[\"Removed tag with id \\\"Glossary\\\".\",\"Cleared tags array; tags are now [].\"]},{\"title\":\"Metadata\",\"subtitle\":\"New metadata entries were added to the wiki.\",\"variant\":\"modified\",\"changeCount\":4,\"changes\":[\"Added metadata entry id \\\"words-changed\\\" with value \\\"10\\\".\",\"Added metadata entry id \\\"percent-changed\\\" with value \\\"0.69\\\".\",\"Added metadata entry id \\\"blocks-changed\\\" with value \\\"content, tags\\\".\",\"Added metadata entry id \\\"wiki-score\\\" with value \\\"51\\\".\"]}]}]}"}