Top 5 Rug Pulls

Top 5 Rug Pulls

The cryptocurrency ecosystem has seen staggering growth since the launch of Bitcoin in 2009. Since then, we have seen many projects emerge, such as Ethereum, Litecoin, Polygon, Solana, and many others. According to data from CoinGecko, the global cryptocurrency market is worth over $1.15 trillion. However, for every promising cryptocurrency project, there are an equal number of scam projects looking to dupe gullible users and steal their hard-earned money.

In fact, the cryptocurrency ecosystem has been haunted by scams and dubious projects for as long as one can remember. Over the years, we have seen several crypto-related scams costing users billions of dollars, with rug pulls emerging as one of the most common scams employed by scammers. In fact, in 2021 alone, crypto scams resulted in a loss of around $7.7 billion, with rug pulls accounting for nearly $3 billion of these losses, an outrageous figure by any metrics. This article will take a look at five of the most infamous rug pulls in the history of crypto and how they impacted investors.

What Is A Rug Pull?

Before we begin, let’s understand what a rug pull means. A “rug pull” occurs when the team behind a particular project suddenly abandons it and sells or removes all of its liquidity. The term was coined from the phrase “pulling the rug out from underneath,” which means withdrawing support unexpectedly. The phenomenon is primarily associated with Decentralized Finance (DeFi) projects but has also been observed in other areas of the crypto ecosystem, such as NFTs, Web 3.0, and even a few metaverse projects. The DeFi space is exceptionally prone to this because of two contributing factors. These are a lack of intermediaries involved in transactions and the potential for extremely high returns.

So what is the modus operandi here? A new project may emerge, offering users returns that are almost too good to be true. As a result, unsuspecting investors would pour money into the project, expecting high returns. Once these projects have access to liquidity, those behind the project have two options. They can sell their tokens at a high price and remove all their liquidity from the project, or they can even use smart contracts to steal funds. With liquidity scarce, investors find selling their tokens extremely difficult and have to sell them at a low price.

Why Are Rug Pulls So Prevalent?

Rug pulls are common in the DeFi space because if you have the technical know-how, it is easy to create new tokens and get them listed on a decentralized exchange, even without a code audit. Code audits are used to conduct security checks to ensure that smart contracts associated with the token do not have any vulnerabilities. Rug pulls are also quite common in the NFT ecosystem, where a surge in interest and an influx of new projects have created the perfect storm for would-be scammers. Furthermore, seeing the returns by prominent NFT collections, new users in the NFT space have been desperately searching for the new “CryptoPunks” or “Bored Ape Yacht Club,” leading them to fall for scams.

Top 5 Rug Pulls

Top 5 Rug Pulls

Let’s look at some of the most infamous rug pulls to hit the crypto ecosystem.


OneCoin can easily be considered one of the biggest rug pulls in the history of crypto. The entities behind the Ponzi scheme were OneCoin Ltd. and OneLife Network Ltd. Both companies were founded by Bulgarian national Ruja Ignatova, also dubbed the “Cryptoqueen.” Ignatova called it the “Bitcoin killer” and was able to raise $4 billion by persuading gullible investors from a host of countries, including Hong Kong, Canada, Norway, Yemen, and a host of others. However, after raising funds, Ignatova disappeared in 2017.

OneCoin’s primary business model was based on selling course materials, acting as a multi-level marketing scheme where buyers were paid to recruit new buyers. To make things worse for investors, OneCoin was not traded and couldn’t be used to purchase anything. Ignatova’s brother was eventually arrested in connection with the scheme, while she remained untraceable. However, reports have recently emerged that mobsters may have murdered the missing mastermind behind OneCoin.


Thodex was a cryptocurrency platform founded by Farik Fatih Ozer in 2017 and quickly garnered 400,000 followers. In 2021, the platform announced the suspension of operations, preventing users from withdrawing their funds. Soon after this announcement, Ozer disappeared, with users also noticing that several cryptocurrencies were trading at lower prices compared to other markets just before the exchange shut down. As a result, users of the exchange ended up losing $2 billion worth of crypto assets.


AnubisDAO was a fork of OlympusDAO, released in October 2021, and claimed to be backed by several assets. The project’s creators also established a Discord server and a Twitter account to update interested users regularly. The project ICO raised $60 million worth of ETH to help fund its liquidity pools, giving investors its native ANKH token in return. However, less than 24 hours after the beginning of the sale, the liquidity pool was drained and sent to a new address. Following this, the protocol’s Twitter handle went offline, and ANKH’s value plummeted to zero.


DeFi100 counts as one of the most brazen rug pulls in crypto history. The project was created as a DeFi protocol on the Binance Smart Chain (now BNB Chain), with the project’s creators absconding with $32 million worth of user funds. Hours later, the creators or hackers posted a not-so-classy message on the official website of the protocol, telling investors they had been scammed, and there was nothing anyone could do about it. While it was initially suspected that the website was hacked, no public comment from the DeFi100 team confirmed that it was indeed a rug pull.

Meerkat Finance

Meerkat Finance was based on the Binance Smart Chain (BNB Chain) and was launched in 2021, quickly attracting a slew of investors. The project managed to garner a staggering $31 million, but barely a day after its launch, it put out a message stating that hackers had managed to steal all the funds from their wallet. However, the community was not convinced, and the radio silence maintained by the protocol’s Twitter handle, coupled with their founders being unreachable, pointed to a classic rug pull. Wu Blockchain, a prominent analyst, called it the biggest fraud project on the Binance Smart Chain (BNB Chain).

How To Avoid Rug Pulls?

Top 5 Rug Pulls

While rug pulls may not be obvious at first glance, there are telltale signs that give these projects away. There are several ways you can avoid such schemes.

Always Go With Established Projects

New projects do not have a proven track record. As a user, one should always choose a well-established project within the community. Most scammers are lazy, and their projects simply imitate popular projects. This is one of the biggest red flags to look out for, which signals that the project has no long-term value.

Research Research Research

Experienced heads in crypto always advise users to “do your research.” The importance of thoroughly researching a project and the team behind it before investing cannot be understated. It would also be prudent to go through a project’s website, roadmap, and whitepaper before coming to a decision.

Stay Away From Unrealistic Returns

Now, resisting the temptation of investing in a project that offers returns that are too good to be true is undoubtedly difficult. However, any project that offers exceptionally high returns should best be avoided because this may point to scammers trying to raise liquidity quickly to fund their operation.

Top 5 Rug Pulls: In Closing

Rug pulls have been a longstanding problem in the crypto ecosystem and will continue to be so as long as scammers can target gullible users. However, there are several ways you can safeguard yourself from these schemes. No method is 100% foolproof, and it is prudent to thoroughly research a project before investing. Additionally, educating yourself about various crypto scams would also come in handy while navigating the crypto ecosystem.