# Rug Pull A crypto exit scam: the creators of a token (see [[Token vs Coin]]) promote it, attract a wave of buyers, and then "pull the rug" — dumping their own holdings, draining the liquidity pool, or disabling sales so buyers cannot get out — and disappear with the proceeds. The name captures the move precisely: the floor is yanked out from under everyone who bought in. Rug pulls range from crude ([[Smart Contract]] code that lets only the creator sell) to slow ("soft rugs," where insiders quietly offload over time while still hyping the project). ## Why the term matters The rug pull is the characteristic crime of the permissionless token economy, and the term marks the thin, often invisible line between a [[Memecoin]] and a fraud. Because issuing a token costs almost nothing (see [[Token vs Coin]]) and listing is open to anyone, the supply of potential scams is bounded only by the supply of buyers. The mechanics are baked into the [[Smart Contract]]: a contract can be written so the deployer retains the power to mint unlimited new tokens, block transfers, or withdraw the entire liquidity pool — "trustless" code that is trustworthy only if you read it, which retail buyers never do. For this vault, the rug pull supplies the analytic frame for reading crypto-corruption stories even when no one is formally charged. The distinction between a successful [[Memecoin]] and a rug pull is frequently just *timing and intent* — did insiders dump on the public, and did they always plan to? The [[$TRUMP Memecoin Universe]] launches drew explicit rug-pull comparisons from critics, who noted that supply concentration and insider fee extraction produced the same outcome (retail losses, insider gains) whether or not it met a legal fraud definition. Operators like [[Hayden Davis]], tied to the $LIBRA collapse, embody the figure of the serial launcher. Proceeds typically move through chains of [[Crypto Wallet]]s and mixers, making [[Money Laundering]] the natural sequel and recovery rare. The term also does cultural work inside crypto: "rugged" has become wry shorthand among traders who treat periodic fleecing as the cost of playing — a normalization of fraud that itself tells you something about the asset class. ## See Also - [[Memecoin]] — the asset class rug pulls most often inhabit - [[Token vs Coin]] — the frictionless issuance that enables them - [[Smart Contract]] — where the trap is coded - [[$TRUMP Memecoin Universe]] — the vault's contested marquee case