Crypto Rug Pulls: Learn How You Can Protect Yourself
All crypto enthusiasts should pay attention to the cryptocurrency rug pulls that have become the reason for billions of dollars in loss in the global cryptocurrency market. In the history of cryptocurrency, we have seen multiple cryptocurrency rug pulls resulting in billions of dollars of investor loss. Crypto rug pulls are unfortunate but very common in the global crypto markets, causing billions of dollars lost for digital asset investors. Crypto rug pulls are much more than we have explained as of now in this article. In the following sections of this article, we have comprehensibly discussed what actually is a crypto rug pull and how you can protect yourself from this financial risk. So be sticky with this page and go through the article till the end. Drag down the page.
How To Protect Yourself From Crypto Rug Pulls
A crypto rug pull is an exit scam. In this scam, a team raises money from mass investors and the public by selling a token with the motive to quietly shut down the token and disappear suddenly stealing the invested money. The victims of this kind of scam are always left with useless tokens. Furthermore, Crypto rug pulls sometimes can be extensively staged involving notable actors and renowned social media influencers to create hype among the investors to lure as many victims as possible.
Some crypto rug pulls gain the trust of investors by using renowned and trusted key opinion leaders on social media. While some crypto rug pulls offer lucrative high yields or exclusive digital goods which we also saw in NFT rug pulls. Cryptocurrency rug pulls can also be done when the owners of the token manipulate the value of the token or coin to deceive investors and fly off with their raised funds.
You should always remember that scammers always lure investors with a sharp increase in the token’s value in a very short period. After luring millions of people and creating fake hype among them to raise funds in millions or billions, the people who created the token sell it to generate a profit leaving investors with abrupt losses. One more important point to remember in order to avoid crypto rug pulls is this kind of scam usually happens on decentralized trading apps or exchanges which enable the scammers to benefit from the pseudonymity of DEXes.
Let’s take a look at the 5 biggest crypto rug pulls that happened ever. The crypto rug pulls are always a spectacle in the crypto universe but some have left an indelible mark on the industry. Take a look at the five biggest crypto rug pulls ever.
Also read: What Is Bitcoin Cash: How Does BCH Work?
Also read: What Is Ethereum: How Does ETH Work?
OneCoin
OneCoinwas a digital asset-based Ponzi scheme that was introduced as a new digital currency that would revolutionize the industry. Ruja Ignatova ran this scheme and claimed that this cryptocurrency was backed by a bunch of experts besides being distributed by a vast network of distributors but actually, it was never actually backed by anything. The distributors of OneCoin simply paid to recruit new investors. In this crypto rug pull the investors lost more than $4 billion.
Squid Game Token
This scam occurred in 2021. Squid Game Token was introduced as inspired by the most-watched Netflix series “Squid Game”. However, Squid Game Token was eventually exposed as one of the biggest crypto rugs pull in history. The creators of this token disabled it from being sold and flew away with investors’ money.
Uranium Finance
It was a DeFi project that vowed to provide investors with exposure to uranium mining. But Uranium Finance was nothing more than a crypto rug pull. The issuers of the Uranium Finance token suddenly drained the token’s liquidity pool and disappeared with the investor’s money, leaving them incurring heavy losses.
AnubisDAO
AnubisDAO, a DeFi project launched in 2021, eventually was proven a crypto rug pull. This cryptocurrency lured investors by promising high returns within a short period. As mentioned, it was nothing more than a sort of crypto rug pull as the developers of the token disappeared with investors’ money after draining the liquidity pool of the project, leaving investors with heavy losses.
Thodex
Thodex was actually a cryptocurrency exchange based in Turkey. But in 2021, this Turkish crypto exchange got hacked and resulted in a lose of over $2 billion. The scammers took away Thodex tokens worth more than $2 billion Thodex token holders. After this scam, the founder of this Turkish crypto exchange Faruk Özer also disappeared. In 2022, Faruk Ozer was apprehended in Albania.
Crypto rug pulls always have been the prime reason that majority of the people avoid investing in cryptocurrencies. In the wake of a number of crypto rug pulls a major portion of investors have opted not to invest in crypto. The significant threat in the crypto space, causing substantial financial losses and preying on unsuspecting investors has thrown people into fear of being scammed. However, by understanding some types of crypto rug pulls and learning the early warning signs of crypto-related scams, investors can reduce the risk of falling victim to these crypto rug pulls. Swipe down the page and read how to identify and avoid these malicious schemes.
To identify these malicious schemes and rug pulls you need to be very cautious and diligent. The very first method that every investor should consider before investing in any token or cryptocurrency is research and investigate. Kindly take a review of the token or project’s team, developer’s reputation, technical goals, and the community. If you find red flags such as lack of history, unknown teams, and not known developers, then you need to protect yourself from them.
All reputable and authentic projects or tokens often undergo third-party security audits. Must check whether the token has undergone a security audit and review for susceptibilities. In order to get reviews from the people who have already invested in the project you can engage in the project community on social media and forums. A legit project always has a strong and active community. Stay tuned to this website for more details.
