Crypto Rug Pulls: 9 Real Examples and How to Avoid Them in 2025

Understanding crypto rug pulls through real examples is essential for protecting your investments in DeFi and cryptocurrency projects. Rug pulls have stolen over $2.8 billion from investors since 2020, with sophisticated scammers continuously evolving tactics to appear legitimate while planning exit scams from the start.

This comprehensive guide examines real rug pull cases, explains warning signs that could have prevented losses, and provides actionable strategies to identify potential rug pulls before investing. Learning from these painful examples helps you avoid becoming the next victim of this devastating fraud.

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Table of Contents

• What Is a Crypto Rug Pull?
• Example #1: AnubisDAO ($60M)
• Example #2: Squid Game Token ($3.4M)
• Example #3: Uranium Finance ($50M)
• Example #4: Meerkat Finance ($31M)
• Example #5: Thodex Exchange ($2B)
• Example #6: OneCoin ($4B)
• Example #7: BitConnect ($2.4B)
• Example #8: SaveTheKids Token
• Example #9: Compounder Finance
• Universal Warning Signs
• How to Avoid Rug Pulls
• Frequently Asked Questions

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What Is a Crypto Rug Pull?

A crypto rug pull occurs when developers abandon a project and run away with investors’ funds. The term comes from “pulling the rug out from under” someone—suddenly removing support and leaving victims with worthless tokens.

Types of Rug Pulls

Liquidity Stealing: Developers remove all liquidity from DEX pools, making tokens worthless and impossible to sell.

Limiting Sell Orders: Smart contracts prevent anyone except developers from selling, allowing creators to dump while others are trapped.

Backdoor Access: Hidden code lets developers mint unlimited tokens or drain funds from contracts.

Exit Scam: Entire platform shuts down with user funds (common with centralized exchanges).

Example #1: AnubisDAO ($60 Million)

Date: October 2021 Amount Stolen: $60 million (13,556 ETH) Blockchain: Ethereum

What Happened

AnubisDAO launched as a dog-themed DeFi project following successful meme coin trends. Developers collected investor funds for a liquidity launch but disappeared with all 13,556 ETH within 20 hours of launch. The official Telegram and Twitter accounts vanished, and liquidity was never added to the pool.

Investors sent ETH expecting to receive ANKH tokens and participate in a DeFi protocol. Instead, they received nothing—funds were immediately transferred to multiple wallets and converted through mixers.

Warning Signs That Were Ignored

• Anonymous team with no doxxed members
• No smart contract audit before launch
• Extremely short presale period (hours, not days/weeks)
• Meme/copycat concept without innovation
• Direct ETH transfers instead of through secure protocols
• No vesting schedule for team tokens

Lesson: Never participate in projects with anonymous teams, unaudited contracts, and rushed launches—regardless of hype.

Example #2: Squid Game Token ($3.4 Million)

Date: October-November 2021 Amount Stolen: $3.4 million Blockchain: Binance Smart Chain

What Happened

Capitalizing on Netflix’s “Squid Game” popularity, scammers created a token supposedly for a play-to-earn game. The token price skyrocketed from $0.01 to $2,856 in one week as buyers rushed in. However, smart contract code prevented anyone except developers from selling.

Developers suddenly removed all liquidity, crashing the token to $0.0007 within minutes. They walked away with $3.4 million while investors held worthless, unsellable tokens. The website and social media disappeared immediately.

Warning Signs That Were Ignored

• Unverified smart contract on BSCScan
• Anti-sell mechanism that should have been obvious red flag
• No connection to actual Netflix or Squid Game creators
• Website filled with grammatical errors
• Anonymous team claiming false partnerships
• Token price movements defying market logic (only up, no corrections)

Lesson: If you can’t sell tokens during testing or if selling requires special conditions, it’s likely a rug pull. Always verify smart contracts.

Example #3: Uranium Finance ($50 Million)

Date: April 2021 Amount Stolen: $50 million Blockchain: Binance Smart Chain

What Happened

Uranium Finance launched as a DeFi yield farming protocol on BSC. A “bug” in the smart contract’s migration process allowed someone (likely developers) to drain $50 million from the protocol. The exploit happened just 50 minutes after migration began.

While developers claimed it was an exploit, the convenient timing and lack of security measures suggested intentional backdoor. Team members disappeared, and investors lost funds deposited for yield farming.

Warning Signs That Were Ignored

• Fork of existing protocol without improvements
• No security audit before launch
• Complex migration process with insufficient testing
• Suspicious “bug” that perfectly benefited developers
• Team unable to prevent or reverse drain
• Very high APYs that attracted large deposits quickly

Lesson: Unaudited DeFi forks are extremely risky. “Bugs” that drain funds are often intentional rug pulls disguised as hacks.

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Example #4: Meerkat Finance ($31 Million)

Date: March 2021 Amount Stolen: $31 million (13.96M BUSD + 73,635 BNB) Blockchain: Binance Smart Chain

What Happened

Meerkat Finance launched as a yield optimizer on BSC promising high returns. Less than 24 hours after launch, the developer wallet activated a function that drained all vault funds. Over $31 million disappeared.

Developers initially claimed they were hacked and would return funds. They briefly returned $10 million to gain trust, then disappeared completely with the remaining $21 million. The “hack” story was cover for an intentional rug pull.

Warning Signs That Were Ignored

• No smart contract audit
• Centralized control functions (developers could drain anytime)
• Brand new protocol with no track record
• Suspiciously high yields to attract quick deposits
• Team controlled majority of tokens
• Partial refund was manipulation to delay investigations

Lesson: Partial fund returns don’t prove legitimacy—scammers use this tactic to buy time. Always verify smart contracts can’t be drained by developers.

Example #5: Thodex Exchange ($2 Billion)

Date: April 2021 Amount Stolen: $2 billion+ Platform: Centralized Exchange (Turkey)

What Happened

Thodex was Turkey’s largest cryptocurrency exchange. Founder Faruk Fatih Özer suddenly shut down the platform and fled to Albania with over $2 billion in user funds. Over 390,000 users lost access to their cryptocurrency.

In the weeks before, Thodex offered suspicious promotions including free Dogecoin giveaways to attract more deposits. These promotions were final collection efforts before exit scam.

Warning Signs That Were Ignored

• Unregulated exchange in jurisdiction with weak crypto oversight
• No proof of reserves or third-party audits
• Founder controlled all funds (no multi-sig)
• Unusual promotions before disappearance
• Withdrawal delays in final weeks
• No segregated customer funds

Lesson: Only use regulated exchanges with proof of reserves. Unregulated centralized exchanges can disappear with all funds. Self-custody where possible.

Example #6: OneCoin ($4 Billion)

Date: 2014-2017 Amount Stolen: $4 billion+ Type: Ponzi Scheme (No Real Blockchain)

What Happened

OneCoin claimed to be a cryptocurrency but had no actual blockchain. It was entirely a Ponzi scheme using multi-level marketing to recruit investors. Founder Dr. Ruja Ignatova disappeared in 2017 with billions. Her brother and associates continued the scam until arrested.

OneCoin tokens couldn’t be traded on any legitimate exchange and had no real value. Returns came from new investor deposits. Over 3.5 million people worldwide invested.

Warning Signs That Were Ignored

• No public blockchain (claimed “private” blockchain nobody could verify)
• Couldn’t trade on any real exchange
• Heavy reliance on recruitment and MLM structure
• Guaranteed returns (real crypto has no guarantees)
• Aggressive marketing and cult-like promotion
• No verifiable technology or code

Lesson: If cryptocurrency can’t be independently verified on a public blockchain and traded on legitimate exchanges, it’s likely fake.

Example #7: BitConnect ($2.4 Billion)

Date: 2016-2018 Amount Stolen: $2.4 billion Type: High-Yield Investment Ponzi

What Happened

BitConnect promised 1% daily returns (3,678% annually) through a “trading bot.” Investors locked BTC into the platform to receive BCC tokens, which paid returns in more BCC. The platform suddenly shut down in January 2018 after cease and desist orders, leaving investors with worthless tokens.

BitConnect was a textbook Ponzi—early investors paid with new investor deposits. When new money stopped flowing, the scheme collapsed. Founders disappeared with billions.

Warning Signs That Were Ignored

• Guaranteed unrealistic returns (1% daily is impossible sustainably)
• Lockup periods preventing withdrawal
• Heavy recruitment incentives
• No verifiable trading bot or strategy
• Token only traded on own exchange
• Cult-like conferences and promotion

Lesson: Guaranteed high returns plus lockup periods plus recruitment bonuses equals Ponzi scheme. These mathematical impossibilities always collapse.

Example #8: SaveTheKids Token

Date: June 2021 Amount Stolen: Estimated $700,000+ Blockchain: Binance Smart Chain

What Happened

Social media influencers promoted SaveTheKids token claiming proceeds would help children. Within hours of launch, several influencer wallets dumped millions of tokens, crashing the price 60%. Influencers made hundreds of thousands while followers lost money.

Investigation revealed influencers received tokens before public launch and immediately sold on their followers. The “charity” element was cover for a coordinated pump and dump.

Warning Signs That Were Ignored

• Celebrity/influencer endorsements without due diligence disclosure
• Vague charity claims with no verifiable donations
• Rushed launch after sudden promotion
• Influencers received insider allocation
• No transparency about tokenomics or distribution
• Emotional manipulation (using children’s charity as cover)

Lesson: Influencer promotions are often paid or incentivized. Always verify charity claims independently. Emotional appeals combined with crypto are red flags.

Example #9: Compounder Finance

Date: December 2020 Amount Stolen: $10.8 million Blockchain: Ethereum

What Happened

Compounder Finance launched as a yield aggregator. The anonymous team suddenly executed a function that transferred all user funds to developer wallets, then converted everything to ETH and sent through mixers. $10.8 million disappeared in minutes.

Smart contracts had hidden administrator privileges allowing complete fund drainage. Code was deliberately obfuscated to hide this backdoor.

Warning Signs That Were Ignored

• Anonymous team with no reputation
• Unaudited smart contracts
• Obfuscated code making audit difficult
• Admin privileges in contracts
• Fork of existing protocol with suspicious modifications
• Extremely high yields attracting deposits quickly

Lesson: Anonymous teams + unaudited contracts + admin privileges = high rug pull risk. Code obfuscation indicates deliberate malicious intent.

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Universal Warning Signs of Crypto Rug Pulls

All crypto rug pull examples share common red flags you can identify before investing.

Team and Transparency

• Anonymous Team: No doxxed members, no verifiable identities
• Stolen Photos: Team pictures from stock photos or stolen profiles
• No LinkedIn/Social Presence: Can’t verify professional history
• Recent Creation: Social media accounts created days before launch

Technical Red Flags

• No Audit: Smart contracts unaudited by reputable firms
• Unverified Contracts: Source code not published on block explorers
• Admin Privileges: Developers can mint tokens, drain liquidity, or pause trading
• Anti-Sell Mechanics: Only developers can sell or selling requires special conditions
• Liquidity Not Locked: Developers can remove DEX liquidity anytime

Economic Warning Signs

• Unrealistic Yields: 100%+ APY or guaranteed daily returns
• Excessive Team Allocation: Developers control >20% of supply
• No Vesting: Team can sell tokens immediately
• Pump Mechanics: Design encourages price pumping not sustainable value

Marketing Red Flags

• Aggressive FOMO: “Limited time,” “last chance” pressure tactics
• Celebrity Endorsements: Paid influencers without disclosure
• Copied Projects: Clone of existing project without improvements
• Vague Roadmap: No specific technical goals or timelines
• All Marketing, No Product: Emphasis on hype over technology

How to Avoid Crypto Rug Pulls

Comprehensive due diligence prevents most crypto rug pulls.

Pre-Investment Checklist

1. Verify Team Identity: Doxxed members with verifiable LinkedIn profiles
2. Check Smart Contract Audit: Recent audit from CertiK, ConsenSys, or Trail of Bits
3. Verify Contract on Explorer: Source code published and readable
4. Check Liquidity Lock: Verify LP tokens locked for 6+ months
5. Review Tokenomics: Reasonable distribution, team vesting schedule
6. Research on Multiple Platforms: Check Reddit, Twitter, Discord for community sentiment
7. Verify Claims: Partnerships, advisors, achievements independently confirmed
8. Test Selling: Buy small amount and confirm you can sell immediately
9. Check Wallet Addresses: Use Glacier21 or similar services to research project wallets for suspicious patterns

Investment Safety Rules

• Start Small: Test with minimal investment first
• Diversify: Never put significant portion into one project
• Take Profits: Remove initial investment when price rises
• Set Stop Losses: Define exit points before investing
• Trust Instincts: If something feels off, don’t invest
• Avoid FOMO: Better to miss opportunity than lose money

Tools for Research

• Token Sniffer: Automated rug pull risk assessment
• RugDoc: Community-driven project reviews
• BSC/Etherscan: Verify contracts and holder distribution
• DeFi Safety: Security scoring for DeFi protocols
• Glacier21: Professional wallet intelligence and blockchain forensics for comprehensive due diligence
• CoinGecko/CoinMarketCap: Project information and community metrics

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Frequently Asked Questions

What are crypto rug pulls and how do they work?

Crypto rug pulls occur when developers abandon projects and steal investor funds. Types include: liquidity stealing (removing DEX pool liquidity), limiting sell orders (code prevents selling except for developers), backdoor access (hidden functions to drain funds), and exit scams (entire platform disappears). Developers build hype, collect investments, then suddenly drain value leaving investors with worthless tokens. Since 2020, rug pulls have stolen $2.8+ billion from crypto investors through sophisticated scams disguised as legitimate projects.

How can I identify potential rug pulls before investing?

Check for: anonymous team (no doxxed members), unaudited smart contracts, unverified contract code, admin privileges allowing fund drainage, unlocked liquidity (developers can remove anytime), unrealistic yields (100%+ APY), excessive team token allocation without vesting, anti-sell mechanics in code, recent project creation (days/weeks old), aggressive FOMO marketing, and inability to verify claims. Use tools like Token Sniffer, verify contracts on Etherscan/BSCScan, check team on LinkedIn, and research project wallets using services like Glacier21 before investing.

Can I recover funds from a crypto rug pull?

Recovery rates from crypto rug pulls are extremely low (1-3%). Best chances: track stolen funds through blockchain explorers immediately, identify if funds reached exchanges and report with evidence, file comprehensive reports with local police and FBI IC3, document everything for potential lawsuits, report to scam databases to warn others. For large losses ($100,000+), consider professional blockchain forensics services like Glacier21 that provide investigation and legal partner coordination. Prevention through due diligence is far more effective than recovery attempts.

What was the biggest crypto rug pull in history?

OneCoin holds the record at $4+ billion stolen from 3.5 million victims worldwide (2014-2017). It claimed to be cryptocurrency but had no actual blockchain—entirely a Ponzi scheme using MLM recruitment. Founder Dr. Ruja Ignatova disappeared in 2017 with billions. Other massive rug pulls: Thodex Exchange ($2B, 2021), BitConnect ($2.4B, 2016-2018), AnubisDAO ($60M in 20 hours, 2021), and Uranium Finance ($50M, 2021). These examples share common traits: guaranteed returns, lockup periods, anonymous teams, and unverifiable technology.

Should crypto projects have audited smart contracts?

Yes, legitimate DeFi projects should have smart contract audits from reputable firms like CertiK, ConsenSys Diligence, or Trail of Bits. Audits identify vulnerabilities, backdoors, and malicious code before launch. However, audits aren’t guarantees—some rug pulls occur despite audits if audit scope was limited or developers added unaudited code later. Check: audit is recent (within 3 months of launch), from recognized firm, covers all contracts, addresses high/critical issues, and smart contract code published matches audited version. Unaudited contracts in DeFi are extremely high-risk for rug pulls.

Why do people fall for crypto rug pulls?

Victims fall for crypto rug pulls due to: FOMO (fear of missing out on profits), social proof (seeing others invest), trust in influencer endorsements, lack of technical knowledge to verify contracts, belief in “too good to be true” returns, herd mentality during hype cycles, sophisticated scammer tactics that appear legitimate, emotional decision-making overriding logic, and insufficient due diligence before investing. Education about warning signs, taking time for research, and using verification tools help prevent victimization. Remember: if returns seem unrealistic or project feels rushed, it’s likely a rug pull.