How Does a Rug Pull Differ from Other Types of ICO Scams?
A rug pull is a specific type of exit scam in the cryptocurrency world where developers abandon a project and take investors' money. Unlike broader ICO scams, which can include Ponzi schemes or projects that simply fail to deliver on promises over time, a rug pull is characterized by a sudden and deliberate exit by the creators.
This often involves the developers draining a decentralized exchange's liquidity pool, causing the token's value to plummet to zero almost instantly. Other ICO scams might involve more prolonged deception, such as faking progress or misrepresenting technology.
A rug pull, in contrast, is a swift and decisive theft.
Glossar
Ico Scams
Fraud ⎊ Initial Coin Offerings (ICOs) frequently manifest as elaborate fraud schemes within the cryptocurrency ecosystem, exploiting investor enthusiasm and a lack of regulatory oversight.
Rug Pull
Fraud Mechanism ⎊ A Rug Pull is a malicious maneuver where the developers of a cryptocurrency project suddenly abandon it after artificially inflating the price, typically by draining the liquidity pool of its underlying assets and disappearing with the funds.