Rug Pull Prevention: How to Spot and Avoid Crypto Scams

When you invest in a new crypto project, you’re trusting code, team, and community—but too often, that trust is stolen. A rug pull, a type of crypto scam where developers abandon a project and steal investors’ funds. Also known as exit scam, it’s one of the most common ways people lose money in DeFi and new token launches. Unlike traditional fraud, rug pulls happen fast, often with no warning. The team disappears, liquidity is pulled, and your tokens turn into worthless digital trash. This isn’t rare—it’s routine. In 2023 alone, over $1.2 billion was lost to rug pulls, according to blockchain forensic reports.

So how do you avoid becoming the next victim? It starts with understanding what makes a project risky. Look at tokenomics, how tokens are distributed, locked, and controlled. Also known as token distribution model, it reveals whether the project is built to last or designed to vanish. If more than 20% of tokens are held by the dev wallet, or if there’s no lock-up on liquidity, that’s a flashing red light. Then there’s blockchain security, the real-world checks like audits, team doxxing, and contract transparency. Also known as on-chain verification, it’s the difference between a project you can trust and one you should run from. No audit? Anonymous team? No liquidity lock? Walk away. You don’t need to be a coder to spot these signs—just ask simple questions: Who’s behind this? Can they access all the money? Is the code public and reviewed?

Most rug pulls don’t come with sirens—they come with hype. A flashy website, a TikTok influencer, a promise of 100x returns. But real projects don’t need to scream. They show their work. They lock liquidity for years. They publish third-party audits. They let you see who’s on the team. And they don’t rush you to buy before you’ve done your homework. The goal isn’t to avoid all new projects—it’s to avoid the ones that are set up to fail. Below, you’ll find real case studies, step-by-step checklists, and breakdowns of recent scams that fooled thousands. Learn from them. Don’t repeat them.