Famous Rug Pull Examples and Losses: A Guide to Crypto Scams

You buy a token because the chart looks like it’s going to the moon. The community is loud on X, the website is slick, and everyone seems to be getting rich. Then, overnight, your investment turns into digital dust. This isn’t bad luck; it’s a rug pull, one of the most common scams in cryptocurrency history. Unlike traditional frauds that take years to unravel, rug pulls happen fast, often leaving investors with worthless tokens and no recourse.

The scale of this problem is staggering. Research from Solidus Labs indicates that over 300,000 scam tokens have been created, defrauding roughly 2 million investors. In terms of financial harm, rug pulls actually surpass the combined losses from major exchange collapses like FTX, Celsius, and Voyager. If you’re entering the crypto space, understanding how these scams work-and looking at the biggest disasters-is your best defense. Here are the famous examples that defined the era of crypto fraud.

What Actually Is a Rug Pull?

A rug pull happens when developers create a new cryptocurrency, hype it up to attract buyers, and then suddenly withdraw all their liquidity or sell their holdings, crashing the price to zero. It’s called a "rug pull" because it feels like someone yanked the rug out from under you while you were standing on it.

These scams generally fall into two categories:

• DeFi Scams: These rely on malicious code. Developers write smart contracts that allow them to mint unlimited tokens, charge massive fees, or even prevent users from selling (a honeypot).
• Exit Scams: These are more about psychology than code. Projects launch with flashy marketing, fake partnerships, and celebrity endorsements. Once enough money flows in, the team disappears, abandoning the project entirely.

The most damaging scams often combine both. They use aggressive promotion to get people in and clever contract programming to keep them trapped until the developers cash out.

Thodex: The $2 Billion Exchange Collapse

When we talk about the largest rug pull in history, we aren’t just talking about a meme coin. We’re talking about Thodex, a Turkish centralized exchange that vanished in April 2021. CEO Faruk Fatih Özer suspended withdrawals, claiming technical issues, before fleeing to Albania. Investors lost over $2 billion worth of cryptocurrency.

This incident was unique because it wasn’t a decentralized protocol failure; it was a centralized platform executing a massive exit scam. For context, this single event accounted for nearly 90% of all value stolen in rug pulls during 2021. It proved that even platforms that look like established exchanges can disappear overnight if the leadership decides to run.

Squid Game Token: When Pop Culture Meets Fraud

If Thodex was about size, Squid Game Token ($SQUID) was about pure greed. Launched in late 2021, it capitalized on the global obsession with the Netflix series Squid Game. The pitch was simple: a play-to-earn game where you could earn tokens by playing.

The price action was insane. Starting at $0.01, the token soared to $2,861 in less than a week. But here’s the catch: early buyers realized they couldn’t sell. The smart contract had a hidden function that restricted sales to only the top 5% of holders. Meanwhile, the founders, who remained anonymous, sold their own supply as the price climbed.

Investigation later revealed that the project had no real website, no verifiable team on LinkedIn, and a whitepaper full of unverifiable claims. The developers made over $3.38 million from the pump before the token crashed 99% in a single day.

AnubisDAO: The Fastest Million Heist

Some scams don’t even last a day. AnubisDAO launched on October 28, 2021, claiming to be a decentralized currency backed by assets. It had a DOGE-inspired logo, no website, and no whitepaper. Yet, it raised nearly $60 million in less than 24 hours.

Why did people invest? Fear of missing out (FOMO). Influencers hyped it on Twitter, and the promise of a "free-floating" asset attracted thousands. Within 20 hours of launch, the developers drained the liquidity pool, which held mostly wrapped Ethereum (wETH), and disappeared. The ANKH token became virtually worthless instantly. This case highlights how quickly capital can move in crypto and how little due diligence some investors perform.

NFT Rug Pulls: Bored Bunny and Celebrity Hype

Rug pulls aren’t limited to fungible tokens. The NFT space saw its share of disasters, with Bored Bunny being a prime example. Announced in December 2021, this project promised branded merchandise, a private metaverse, and huge returns. Celebrities like Floyd Mayweather and Jake Paul endorsed it.

The collection sold out within hours, generating about 2,000 ETH. But blockchain sleuths noticed something odd: the NFTs supposedly owned by celebrities were actually purchased by wallets linked to the developers themselves. This insider trading inflated the perceived demand. Once the hype died down, the floor price plummeted to just 0.085 ETH. Many buyers were left holding digital art with no utility and no secondary market interest.

Recent Cases: Froggy and Hawk Tuah

Even as we move into 2024 and beyond, rug pulls haven’t stopped. They’ve just evolved. Froggy (FROGGY) emerged in early 2024 as a meme token targeting social media users. It used humorous branding and promises of quick profits. Early investors funded the liquidity pool, pushing the price up, but developers quickly drained it. FROGGY traded at $0.0000000073964, a 99.95% drop from its peak.

Then there’s Hawk Tuah (HAWK), launched in December 2024 by internet personality Hailey Welch. This case brought legal scrutiny to the forefront. Within 20 minutes of debut, the token’s value crashed from a $500 million market cap to $60 million. Law firm Burwick Law filed a federal lawsuit against Welch and her team, alleging fraud. The HAWK token dropped 71% from its all-time high, showing that celebrity endorsement doesn’t guarantee stability-or honesty.

How to Spot a Rug Pull Before You Buy

You can’t avoid every scam, but you can avoid the obvious ones. Here are red flags to watch for:

• Anonymous Teams: If you can’t find the founders on LinkedIn or other professional networks, be skeptical. Pseudonyms are fine for DeFi protocols, but not for projects promising real-world utility.
• Unlocked Liquidity: Check if the liquidity pool is locked. If developers can withdraw liquidity at any time, they can crash the price whenever they want.
• Contract Restrictions: Use tools to scan the smart contract. Look for functions that allow the owner to mint new tokens or blacklist addresses from selling.
• Wash Trading: If volume is high but the number of unique wallets is low, bots might be faking activity.
• No Website or Whitepaper: If a project has millions in funding but no clear documentation, it’s a major warning sign.

Next Steps for Investors

Don’t let FOMO drive your decisions. Before investing in a new token, spend ten minutes checking the contract address on sites like Etherscan or Solscan. Look for audits, verify the team’s identity, and check if the liquidity is locked. If a deal sounds too good to be true-like a 100x return in a week-it probably is.