Crypto Scammers Use Hype to Steal Billions: How Rug Pulls Work

A 'crypto rug pull' is a scam where a team behind a token or project quietly withdraws all funds and disappears, leaving investors holding worthless coins.

This pattern typically involves a new token launching with a polished website, active social media, and promises of future development. Early buyers are lured in by hype, influencer endorsements, and the promise of high returns.

The team then withdraws liquidity from exchanges, causing the token's price to crash nearly instantly. This can happen within minutes or even seconds, leaving remaining investors with tokens that are worthless.