A crypto rug pull is a type of scam where the people behind a cryptocurrency project suddenly take all the investors’ money and disappear.
Imagine putting your money into a project that promises big returns. Everything looks great at first — cool website, active social media, maybe even influencers talking about it. Then, one day, the website is gone, the developers delete their accounts, and your money? Gone too.
That’s a rug pull. The developers “pulled the rug” out from under you.
How Do Rug Pulls Happen?
Here’s how a typical rug pull works:
- Scammers create a new cryptocurrency or DeFi (Decentralized Finance) project.
- They make it look legit with flashy marketing and fake endorsements.
- People invest, driving up the value.
- Once they collect enough money, the scammers sell off their tokens or drain the liquidity pool (where the money is kept).
- They disappear, and the token value crashes to zero.
Since crypto is not fully regulated in many countries, it’s easier for scammers to get away with this compared to traditional finance.
Real-Life Examples of Rug Pulls
Here are a few high-profile rug pulls to show how real and dangerous they can be:
- Squid Game Token (SQUID): This coin was based on the popular Netflix show. It gained attention quickly, and people bought in — but the creators ran away with over $3 million.
- Meerkat Finance: A DeFi project on Binance Smart Chain. The team claimed they were “hacked,” but later it was revealed they just took off with around $31 million.
- AnubisDAO: Raised about $60 million in Ethereum in just 20 hours — and then everything vanished.
These scams didn’t just target beginners. Even experienced investors lost money.
Types of Rug Pulls
There are a few main ways rug pulls can happen:
- Liquidity Theft: The project owners take out the liquidity (funds) from the exchange, making the token worthless.
- Dumping Tokens: Developers hold a large number of tokens. When the price goes up, they sell everything, crashing the market.
- Fake Projects: Some projects don’t even have real technology — they just exist to collect money and vanish.
How To Identify a Rug Pull
Spotting a rug pull in advance isn’t always easy, but here are some red flags to look for:
- No Audits: If the smart contract (the code behind the project) isn’t audited by a trusted third party, that’s a warning.
- Anonymous Team: Real teams show their faces and have a track record. If you can’t find real info about the team, be cautious.
- Crazy High Returns: If it sounds too good to be true, it probably is.
- No Lock on Liquidity: If the liquidity pool isn’t locked for a certain time, the owners could take it anytime.
- Poor Website and Whitepaper: A legit project usually has clear, detailed documentation. If things look rushed or vague, think twice.
- Limited Token Holder Distribution: If most of the tokens are owned by the creators, they could crash the market with one big sell.
How To Stay Safe From Rug Pulls
Here are some smart steps to protect yourself:
- Do Your Own Research (DYOR): Always read the whitepaper, check who’s behind the project, and verify what the community says.
- Use Trusted Platforms: Stick to well-known exchanges like Binance, Coinbase, or Kraken.
- Check for Smart Contract Audits: Look for audits from known firms like CertiK, Hacken, or Trail of Bits.
- Watch the Liquidity Pool: Use tools like TokenSniffer or DEXTools to analyze token info.
- Diversify Investments: Don’t put all your money into one project. Spread the risk.
- Avoid Hype and FOMO: Just because something is trending doesn’t mean it’s safe. Scammers love using hype to trap people.
Salary Range in Crypto and Web3 Security
If you’re interested in working in crypto — especially in security, compliance, or blockchain analysis — there’s a lot of opportunity and good pay.
- Blockchain Security Analyst: $90,000 – $180,000/year
- Smart Contract Auditor: $100,000 – $200,000/year
- Web3 Developer with Security Focus: $120,000 – $250,000/year
- Cybersecurity in Crypto Firms: $85,000 – $160,000/year
Salaries may vary based on experience, location, and whether it’s a remote role or not. Freelancers and consultants in this field can also charge $100–$300 per hour.
How To Apply for Crypto Jobs and Stay Informed
If you want to work in crypto security or just stay informed about safe investing, here are some tips:
- Job Boards to Watch:
- CryptoJobsList.com
- Web3.career
- Remote3.co
- Angel.co (now Wellfound)
- LinkedIn (search “blockchain” or “crypto”)
- Certifications and Courses:
- Certified Blockchain Security Professional (CBSP)
- Smart Contract Hacking Bootcamps (like those by ConsenSys or ChainShot)
- Free Courses on Coursera, Udemy, and YouTube
- Stay Updated Through:
- Twitter/X (Follow crypto analysts and security experts)
- Reddit (r/CryptoCurrency, r/DeFi, r/ethdev)
- Discord communities for crypto projects
- News sites like CoinDesk, CoinTelegraph, and Decrypt