A rug pull is a type of cryptocurrency scam in which the developers of a project suddenly withdraw all the funds and disappear—leaving investors with worthless tokens.

It usually happens in decentralised finance (DeFi) or memecoin projects where anyone can create a token and promote it through social media. The scammers often build excitement, attract liquidity (investor money), and then “pull the rug” by draining the liquidity pool or selling off their large holdings in one move.

There are two main kinds:

• Liquidity rug pulls: Developers create a token, pair it with a well-known coin like ETH on a decentralised exchange, attract investors, and then remove all the ETH from the pool.
• Developer rug pulls: The team simply abandons the project—shutting down websites, deleting social media, and leaving holders stranded with tokens that can no longer be traded.

In short, a rug pull is like a digital bank run—except the bank was never real to begin with. It’s one of the biggest risks in the unregulated corners of crypto.