{"id":28898,"date":"2025-11-26T12:04:45","date_gmt":"2025-11-26T20:04:45","guid":{"rendered":"https:\/\/www.spokeo.com\/compass\/?p=28898"},"modified":"2025-11-26T12:04:49","modified_gmt":"2025-11-26T20:04:49","slug":"crypto-rug-pull","status":"publish","type":"post","link":"https:\/\/www.spokeo.com\/compass\/crypto-rug-pull\/","title":{"rendered":"NFT and Crypto Scams: What Is a Rug Pull?"},"content":{"rendered":"\n

At best, most Americans are skeptical about cryptocurrency (Pew recently reported<\/a> that 63% of Americans have little confidence in crypto\u2019s reliability and safety). But that hasn\u2019t stopped crypto from becoming a staple in the investing world\u2014with the global market value of cryptocurrency leaping 36% in 2024<\/a>. So, if you\u2019re hoping to join ranks with the 562 million people crypto owners worldwide, it helps to go into your investment with eyes wide open to scams and risks. And one of the biggest of all? Rug pulls.\u00a0<\/p>\n\n\n\n

Here, we\u2019ll dig into what rug pulls are, how they affect the sector at large, and what you can do to avoid falling victim to one. <\/p>\n\n\n\n

What Is a Crypto Rug Pull?<\/h2>\n\n\n\n

Since it first broke into the mainstream in 2018 (it\u2019s been available since around 2009), crypto has become central to the online scam artist\u2019s repertoire, especially in popular grifts like online and over-the-phone phishing, catphishing, and identity theft. Scammers like to target crypto as it\u2019s difficult to trace; there\u2019s no centralized banking authority to flag suspicious transactions, and unlike most bank transfers, crypto transfers can\u2019t be reversed. And the problem is so widespread that consumers around the world reportedly lost $2.2 billion<\/a> to crypto scams in 2024, 21% more than they did in 2021.\u00a0<\/p>\n\n\n\n

Despite their popularity, those day-to-day scams aren\u2019t crypto rug pulls, but rug pulls rely on many of the same elements \u2014 namely, crypto\u2019s lack of traceability and centralized accountability.<\/p>\n\n\n\n

In a crypto rug pull, a person or group accrues assets from the public by selling a token (that\u2019s crypto\u2019s digital representation of assets \u2013 the \u201ccurrency\u201d in cryptocurrency), commonly promising a big return on investment, or even exclusive rewards and other incentives for investing. Once they\u2019ve scooped up tons of assets from those token investments, they suddenly shut the project down entirely and often \u201ccoincidentally\u201d disappear from public view at the same time. This, of course, leaves them holding a great big bag of money while their victims have nothing to show for it but piles of worthless tokens. The rug has been pulled out from under them in one swift motion. <\/p>\n\n\n\n

\"types<\/figure>\n\n\n\n

Types of Crypto Rug Pulls<\/h3>\n\n\n\n

Crypto rug pulls generally follow the same cadence of \u201cgather assets and unceremoniously bail,\u201d but they do vary in terms of execution. Crypto rug pulls typically fall into one of these categories:<\/p>\n\n\n\n