- Crypto Rug Pulls are scams in which the project is shut down by developers.
- Scammers utilize the credibility of influencers to loot investors.
- Cautious investment decisions can help investors to be secured from rug pulls.
Crypto rug pull is an exit scam in which the developers of a token shut down the project or suddenly disappear after raising money from investors and the public. Thus the tokens purchased by investors become worthless.
Rug pulls are extensively planned events by notorious developers. They leverage social media influencers and hype-generating campaigns to loot more and more victims. Scammers even utilize the credibility of trusted key opinion leaders to attract users. Extremely high yields and exclusive digital goods are also offered to the customers.
The project owners manipulate the value of the token, in the beginning, to deceive investors and loot their investments. Rug pulls are usually preceded by a sharp increase in the price of the token for a short time to attract investors. The tokens are sold by the developers to generate wealth by leaving investors to incur huge loss.
Types of Rug PullsRug pulls can be broadly divided into two categories according to the period required for the exit they are hard Rug pulls and Soft Rug pulls.
