A rug pull is a type of scam where developers create and promote a fake project only to disappear with investor funds. Here’s a roundup of 3 infamous rug pulls that were clearly scams yet managed to dupe investors of millions of dollars.
For the unacquainted, a rug pull is a type of scam where developers create and promote a fake project only to disappear with investor funds. They figuratively pull the rug from beneath the feet of unsuspecting investors, hence the name.
Some rug pulls employ elaborate schemes, creating fake projects that seem plausible and worthy of investment. However, many rug pulls clearly have zero utility and usually piggyback on some trending event to draw investor interest.
Surprisingly, several investors fail to see these projects for what they are – a blatant attempt to fleece investors of their funds – and pour monies into these fraudulent platforms. The result? Pain and suffering for investors, with entire savings being lost in some cases.
Here’s a roundup of 3 infamous rug pulls that were clearly scams yet managed to dupe investors of millions of dollars.
The Squid Games Token
This is one of the biggest crypto rug pulls in recent history. In October 2021, a group of anonymous developers created a supposed pay-to-play token and promised coin-holders access to an online game inspired by the popular South Korean TV show ‘Squid Games.’
With all the hype around the show, investors disregarded warning signs and put their money behind the project. Thanks to this immense investor interest, the price of the Squid Games token saw a 2,30,00,000 percent gain in a week and peaked at USD 2,862, according to data from CoinMarketCap.
Once the price reached this peak, the scammers decided to sell their holdings, causing the price to come crashing down. The Squid Games went from an all-time high to USD 0 in minutes, leaving investors holding the bag.
A crypto project named after a viral disease is not something most people would take seriously, leave alone invest in. However, not all investors see things the same way; where some see a recipe for disaster, others somehow see a burgeoning investment opportunity. And that’s exactly what happened with MonkeyPoxInu.
The token was launched in May this year and was listed on PancakeSwap. Monkeypox had made a resurgence at the time and was all over the news. This gave the crypto project a wave to ride on, with investors pouring money into the fake coin, hoping it would moon. However, MPOX lost 99 percent of its value three days later, leaving investors hanging.
CryptoWhale estimates that the miscreants behind the fake project got away with USD 400 million in investor funds. However, crypto users believe that figure is too high for a token that was only live for three days. In any case, plenty of investors put money behind the project, which turned out to be nothing but a hoax.
Queen Elizabeth Tokens
The news of Queen Elizabeth’s passing hit Britain pretty hard and saddened many. However, this did not stop opportunists from making the most of the situation. Just hours after her death, crypto grifters launched several meme coins inspired by the late monarch. As per a Blockworks article, over 40 projects named after the Queen rolled out on BNB Smart Chain and Ethereum 24 hours after her majesty’s passing.
One coin, Queen Elizabeth Inu, saw a 47,655 percent gain, racking up USD 6 million in trading volume, according to Dex Screener. However, the coin is simply riding on all the hype around the Queen’s death and probably has zero utility. Most of the other projects have little to no liquidity, a clear indicator of a potential pump and dump rug pull.
There haven’t been any developments regarding these projects crashing just yet. However, with plenty of investors backing these seemingly worthless coins, it’s a disaster waiting to happen.
The cryptoverse is expanding at break-neck speeds. It’s almost like there’s a new crypto project every other day. Many of these upcoming developments could be rug pulls looking to dupe investors. Therefore, it is always important to do your research before investing in a coin.
Look at the problem(s) the project is looking to solve, the utility it offers, the coin’s fundamentals, the developers’ history, the clarity and quality of its whitepaper, KYC audits, etc. A thorough inspection of all these factors should give you a fair idea regarding the legitimacy of a project.
(Edited by : Priyanka Deshpande)