The phrase is older than crypto. To pull the rug out from under someone is to take away the thing they were standing on, all at once. In crypto the rug is the money a token's buyers put in, and the people pulling it are the ones who launched the token or control it.
This guide covers the types, how big the problem is and the warning signs. When you want to check a specific token, use the step-by-step Solana checklist.
What is a rug pull, exactly?
A rug pull is any scheme in which the people with control over a token use that control to take the value out of it, leaving ordinary holders with tokens that cannot be sold for anything like what they paid. The key word is control. A token that collapses because buyers lose interest is a failure, not a rug. A token that collapses because its creator withdrew the liquidity is a rug.
Chainalysis, which traces crypto crime on-chain, put rug pulls at 37% of all cryptocurrency scam revenue in 2021, more than $2.8 billion, up from 1% the year before. Almost 90% of that came from one case, the Turkish exchange Thodex, whose chief executive disappeared after withdrawals stopped. The second largest, AnubisDAO, raised nearly $60 million and lost it about 20 hours after launch.
What are the types of rug pull?
| Type | What happens | What gives it away |
|---|---|---|
| Liquidity pull | The creator withdraws the token's trading pool. The price goes to near zero in one transaction. | LP tokens held by a wallet, not burned or locked |
| Mint and dump | The creator prints new tokens and sells them into the pool, diluting everyone. | Mint authority still active |
| Honeypot | Buying works, selling does not: wallets are frozen or sells are taxed to nothing. | Freeze authority active, or Token-2022 transfer fees, hooks or a permanent delegate |
| Soft rug | Insiders sell their large holdings slowly and stop working on the project. | A few wallets holding a large share, early "bundled" buys |
| Insider rug | Whoever controls the project's money or accounts takes it, after launch, from inside a community. | Funds collected into one person's wallet, "secret" campaigns |
The first three are technical and can be ruled out by reading the contract. The last two are about people and cannot.
The fifth row is the one most guides skip, and it is the one we know best. In December 2024 the holders of the Epileptic token paid about $14,400 for promotions, including roughly $5,000 for a campaign whose details the project's leader said had to stay secret. In January he went quiet. The token's contract was never at fault. How the holders responded is in the community takeover guide.
How common are rug pulls on meme coins?
Very. In a May 2025 study of pump.fun, the Solana launchpad where most meme coins now start, Solidus Labs found that 98.6% of the tokens it examined showed the patterns of a rug pull or a pump-and-dump. Of more than seven million tokens deployed with at least five trades between January 2024 and March 2025, only about 97,000 still had more than $1,000 of liquidity. pump.fun disputed the report's characterisation.
Read that number carefully. It does not mean 98.6% of creators were criminals; it means almost every token behaved like one that was abandoned or dumped. For a buyer the practical conclusion is the same: the default outcome for a new meme coin is that it goes to nothing, and the burden is on the token to show otherwise.
What are the warning signs of a rug pull?
The technical signs can be checked in a few minutes, and each one rules out a whole type of rug:
- The mint authority is still set. Someone can create unlimited new tokens.
- The freeze authority is still set. Someone can stop your wallet from selling.
- The LP tokens are not burned or locked. Someone can remove the pool.
- A handful of wallets hold most of the supply, excluding the pool itself and the burn address.
- The token uses Token-2022 extensions such as transfer fees or a permanent delegate, which can be turned against holders.
The human signs take longer and matter as much:
- A promised listing, partnership or "big announcement" with no date and no one named.
- Money collected by one person, for something that cannot be shown.
- Questions in the group answered with bans.
- Pressure to buy now, before a moment that never arrives.
A clean contract only removes the technical rugs. The Epileptic token has had its mint and freeze authority revoked and 99.99% of its LP burned since launch, which rules out the first three rows of the table. It did not stop the fifth. Check both halves.
What should you do if you were rug pulled?
Write down the token's contract address, the wallets involved and your transactions while they are easy to find. Report it: in the US the place is the FBI's Internet Crime Complaint Center, IC3, and most countries have a national equivalent. Warn others in public with the evidence, not with accusations.
Do not pay anyone who offers to get the money back. Blockchain transactions cannot be reversed, and "recovery" offers that arrive after a loss are one of the most common follow-up scams.
Then look at what kind of rug it was, because that decides whether anything is left. A token whose liquidity was pulled has nothing to trade against. A token that was merely abandoned still has a pool and holders, and sometimes those holders take it back. That is the subject of the next guide: do rug pulls ever recover?
Questions people ask
What does rug pull mean?
The phrase comes from "pulling the rug out from under someone". In crypto it means the people behind a token take the money and leave, so the price collapses and holders are left with tokens nobody will buy.
Is a rug pull illegal?
It depends on what was promised and where. Taking investors' money after lying about a project can be prosecuted as fraud in many countries. A developer who never promised anything and simply sold their own tokens is often doing something harmful but not clearly illegal. If you lost money, report it; in the US that is the FBI's IC3.
What is a soft rug pull?
A soft rug is the slow version: the team does not pull the liquidity in one transaction, it sells its holdings gradually and stops working on the project. It is the most common kind on meme coins and the hardest to prove.
Can you get your money back after a rug pull?
Rarely. Blockchain transactions cannot be reversed, and the wallets usually move the funds on within hours. Be wary of anyone who offers to recover it for a fee; recovery services are one of the most common follow-up scams.
Is every token that goes to zero a rug pull?
No. Most meme coins lose almost all their value without anyone stealing anything: buyers simply leave. A rug pull needs someone who could drain the token and did. That distinction matters, because it decides whether the token can still be revived.