What Is an ‘Exit Scam’ and How Does It Differ from a Rug Pull?
An exit scam is a broad term for founders disappearing with investor funds after a successful funding round, often without delivering a product. A rug pull is a specific type of exit scam, typically executed on a DEX, where developers remove liquidity, leaving investors with worthless tokens.
Glossar
Exit Scam
Departure ⎊ An Exit Scam occurs when the creators of a cryptocurrency project or platform abruptly cease operations, liquidate project assets, and disappear with investor funds, often after a period of high-profile promotion.
Scam
Deception ⎊ A scam in the context of cryptocurrency involves deceptive practices designed to defraud investors by misrepresenting a project's legitimacy or potential returns.
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.