Rug Pull

A rug pull is a type of exit scam that occurs in the crypto market. It refers to the act of a project team or developers of a project, abruptly and unexpectedly withdrawing their liquidity, causing its value to drop significantly and leaving investors with serious losses.

The term “rug pull” comes from the analogy of a rug being pulled out from under investors, leaving them to fall. The scammers will typically do this by withdrawing the liquidity from the decentralized finance (DeFi) pools that hold the cryptocurrency, or by burning or removing the tokens that were used to launch the project, making them worthless.

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