rug pull
Rug pull (noun) means a form of fraud in which the people behind a cryptocurrency project take the money investors have put in and abandon the project, leaving the remaining holders with a worthless or unsellable asset. Example: “The token lost almost all its value within an hour, and holders quickly concluded it had been a rug pull.”
How to use rug pull
Learner’s notesIn plain EnglishWhen the people who made a crypto coin run off with the money.
Informal and journalistic. Common in crypto communities and in news reporting about them; not a legal term, though the conduct it describes may amount to fraud.
Used both as a noun (it was a rug pull) and as a verb (they rug pulled the community). The verb form is newer and still very informal.
Trace the full origin ↓Fill the gap
Can you complete this real example?
The token lost almost all its value within an hour, and holders quickly concluded it had been a _____.
Etymology
From the English idiom to pull the rug out from under someone, meaning to remove support suddenly and without warning.
Related words
Frequently asked questions
What is the difference between a rug pull and a pump and dump?
In a pump and dump, an existing asset's price is inflated by coordinated hype and then sold off by the organisers, but the asset usually continues to exist and trade. In a rug pull, the project itself is abandoned by the people who created it, often by removing the funds that made the token tradable at all. A rug pull therefore tends to leave holders with something they cannot sell.
What is a soft rug pull?
A soft rug pull describes a project whose team quietly stops developing it and withdraws, without an obvious single moment of theft. The value drains away gradually rather than vanishing at once. The term is loose and people disagree about where ordinary project failure ends and a soft rug begins.
Is a rug pull illegal?
Rug pull is a community label rather than a legal category, so the answer depends on the jurisdiction and the facts. Conduct described this way may be prosecuted under existing fraud or securities law, but that is a matter for regulators and courts rather than something the term itself decides.
What is the meaning of rug pull?
"rug pull" (noun) means a form of fraud in which the people behind a cryptocurrency project take the money investors have put in and abandon the project, leaving the remaining holders with a worthless or unsellable asset.