A rug pull is a fraudulent scheme where founders of a project – or people close to the founders – trick victims into investing in said project and then abandon it. In doing so, the perpetrators “pull the rug” out from underneath the unaware victims.
Rug pull red flags: • An anonymous development team. • Promises of crazy returns. • A lack of reputable audits. • Overly centralised liquidity distribution. • A lack of any real use case. • No time lock on sell orders for developers. • Harsh censorship of dissenting community activity.
Time stamps: 0:00 What is a rug pull? 0:35 Soft rug pulls vs hard rug pulls 0:55 Type 1: Dumping 1:29 Type 2: Blocking sell orders 1:54 Type 3: Stealing liquidity 2:14 Are crypto rug pulls illegal? 2:54 How to avoid crypto rug pulls
