# Rug Pull

> A scam where the creators of a token suddenly drain liquidity or sell their stash, leaving holders with worthless tokens.

Canonical URL: https://fudfomo.co/glossary/rug-pull
Source: What The Block! Dictionary v1.0 (last updated 2026-04-25), browsable at https://wtb.fudfomo.co.

## Definition

A rug pull is a kind of exit scam common with new tokens. The team behind the token builds excitement, attracts buyers into a liquidity pool, and then suddenly removes the liquidity or dumps their own holdings.

The price collapses to nothing and the team disappears. Telltale signs include anonymous teams, large insider allocations, and contracts that let the deployer change the rules.

## Regulatory context

Rug pulls are typically illegal under fraud laws, but recovering funds is hard once they have moved on chain.

## Related terms

- [Exit Scam](https://fudfomo.co/glossary/exit-scam): When the people running a project disappear with users' money.
- [Tokenomics](https://fudfomo.co/glossary/tokenomics): The economic design of a token: total supply, how it is distributed, and how it changes over time.
- [Liquidity Pool](https://fudfomo.co/glossary/liquidity-pool): A shared pot of two tokens that lets people trade between them on a decentralised exchange.

## See the full catalogue

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