What is Rug Pull Scam?

“We’re all getting rich, you throw 1 and it gets 100 and even We’re going to the moon.” Speeches like these are very common in the crypto asset market and are actually just as dangerous. You may have found a crypto with a lot of rising potential from social media, from an acquaintance or through your own research. Alright What if it doesn’t rise, what if it’s a scam?

To these rug pull or rug pulling scam It is said. Another name is exit scam well exit scamis. Times when this type of fraud is most common These are bull periods.

Rug pull scams; The developers, team or managers behind a crypto asset that has high promise or could be very successful suddenly All investors take their money and run. Well, of course, when the situation is like this, the investors of the project will spend all their money. He suddenly loses it.

Here’s everything you need to know about rug pull scams:

First, rug pull scams are common in the crypto space. Tokens of such projects are usually in decentralized exchanges they are traded. They appear suddenly and have even been called the Bitcoin or Ethereum of the future.

Team and founders is anonymousthey do not have locked tokens, they promise very high returns or the price goes down in a short time. ‘He will go to the moon’ It is claimed. If a crypto asset project you are considering investing in has such red flags, you should do more research and perhaps not invest or scale back your investment.

A study by CertiK focused on 40 rug pull scams between 2020 and 2023. Scammers in total for 12 million dollars He discovered that he had stolen as much money.

This research also revealed that 40 frauds On the 25th, the project team escaped.found that one of the project developers defrauded the investors in 4 of them, the project founder was responsible for 6 of them, and the remaining 5 of the projects were rug pulled due to other unclassifiable reasons.

In addition, the average number of rug pull scams is 93 days They found that the project was ongoing and then the plug was pulled.

The 5 biggest rug pull scams in crypto asset market history:

In fact, Turkish crypto asset investors are accustomed to rug pull fraud due to the Thodex scandal, but we will talk about this in a moment. The biggest rug pull scams everLet’s look at it, who its founders are, how much they stole, and whether those behind this fraud have been arrested.

The world’s biggest rug pull scam is OneCoin.

• Who is the founder: Ruja Ignatova
• How much was stolen: $4 billion
• Was he arrested: No

Thodex, which we are all familiar with, was actually a rug pull scam.

• Who is the founder: Faruk Fatih Özer
• How much was stolen: $2 billion
• Was he arrested: Yes

AnubisDAO fraudsters made off with investors’ money less than 24 hours later.

• Who is the founder: Unknown
• How much was stolen: $60 million worth of Ethereum
• Was he arrested: No

SquidGame Token, inspired by the popular Netflix series, deeply upset its investors.

• Who is the founder: Unknown
• How much was stolen: $3 million
• Was he arrested: No

When all the Mutant Ape Planet NFTs of the project were sold, the founder tried to escape by doing rug pulls.

• Who is the founder: Aurelien Michel
• How much was stolen: $2.9 million
• Was he arrested: Yes

Can we understand that a crypto asset project will not rug pull?

If you look at examples of rug pull fraud from a distance, it is as if everyone who invested in the project suddenly will be rich You will notice that they are introduced as follows. The first indicator that a crypto asset project will not do a rug pull is the identity of the founders and developers behind the project. public is that it is.

For example, if you look at the top 10 crypto assets by market capitalization, their founders and developers are obvious or Well-known decentralized systems like Bitcoin are beings.

From now on, tokens What percent of the project team? It is necessary to see that it is held by. of the project institutional investors if they have who It is also important to look at it.

Finally, a project to the road map Having it is also a plus. Apart from these, it is an advantage that it is listed on major crypto asset exchanges, the investor community is large and the project is completely decentralized.

After looking at examples and characteristics of rug pull scams, we now look for crypto asset projects that raise similar red flags. You can detect it much better.

Our other related content: