Rug pull.

In plain English

If this has happened to you, you have reporting options and they are worth using: the FTC takes consumer fraud reports, the SEC takes tips on securities fraud, and your local police report creates a record for tax and legal purposes. Save the wallet addresses, transaction hashes, screenshots, and every message from the promoters before anything is deleted. A rug pull works because the creators keep control, whether by holding most of the supply, retaining admin rights in the smart contract, or being the only source of liquidity in the trading pool. When they withdraw that liquidity or dump their holdings, the price collapses and buyers find no one on the other side. These operations are built by people who plan the exit in advance, and being targeted by a professional deception is not carelessness.

01Why it matters

Rug pulls are engineered to look identical to a legitimate early project right up until the moment the money leaves, which is why documentation and prompt reporting matter more than self-blame.

02The math, step by step

Say a token launches with $300,000 of liquidity, half from buyers and half from the creators. The creators hold admin rights and withdraw their $150,000 plus the accumulated buyer funds. The pool empties, the quoted price falls toward zero, and a holder who bought $2,000 can sell into essentially nothing.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

Every figure on this page is sourced to a primary document. Tap to open the original.