SecurityIntermediate

Recognizing Rug Pulls and Exit Scams

Common warning signs of a project designed to take investors' funds and disappear.

6 min readPublished 2026-09-25

Key takeaways

What to remember

A rug pull is a scam where creators withdraw funds/liquidity and disappear.
Warning signs include anonymous teams, unlocked liquidity, and risky contract permissions.
Urgency-driven marketing with little substance is a common red flag.
Visual polish alone says nothing about legitimacy.

What a rug pull is

A rug pull is a scam where a project's creators build up investor interest and funds, then abruptly withdraw the project's liquidity or funds and disappear, leaving investors holding a token that's suddenly worthless or untradeable.

Common warning signs

Anonymous teams with no verifiable track record making large, specific promises.
Liquidity that isn't locked, or locked for only a very short period.
Contract permissions that let the creators mint unlimited new tokens or freeze others' ability to sell.
Aggressive, urgency-driven marketing ("buy now before it's too late") with little substantive technical or economic detail.
Unverified or unaudited smart contract code for a project asking people to deposit significant funds.

Common mistake

A professional-looking website is not proof of legitimacy

Visual polish is inexpensive to produce and says nothing about a project's actual code, team, or intentions. Warning signs are found by checking contract permissions, liquidity locks, and team verifiability — not by how the marketing looks.

What to remember

A rug pull is a scam where creators withdraw funds/liquidity and disappear.
Warning signs include anonymous teams, unlocked liquidity, and risky contract permissions.
Urgency-driven marketing with little substance is a common red flag.
Visual polish alone says nothing about legitimacy.