Crypto Safety Tips › How to Spot a Rug Pull
The short answer: A rug pull is when the people behind a token take the money and run, usually by pulling the liquidity so nobody can sell. Before buying a new token, check whether the liquidity is locked and for how long, how much the developer and top wallets hold, whether others have managed to sell, and whether the team and contract have a track record. If you can't check, don't buy.
What is a rug pull?
A new token trades against a pool of money called liquidity. If the developer controls that liquidity, they can withdraw it at any time. The price collapses, and everyone holding the token is left with a bag nobody can buy. Other versions include developers quietly dumping a huge hidden supply, or changing the contract so selling is blocked.
The checklist
- Is the liquidity locked? For how long? Unlocked liquidity can be pulled at any moment.
- How much does the developer hold? A big dev bag can be dumped on you.
- How concentrated are the top holders? If a handful of wallets hold most of the supply, they control the price.
- Has anyone managed to sell? Plenty of buys and no sells can mean a honeypot.
- Is there a sell tax, and can it change? A tax that can be raised later is a warning sign.
- What's the developer's history? Previous launches that went to zero are a pattern.
Red flags to walk away from
- Pressure to buy now, countdowns and "last chance" posts.
- Anonymous teams with no track record and big promises.
- Paid shilling, fake followers and copy-paste hype.
- A contract you can't check, or tools you're told not to use.
What do I do if I get rugged?
There is usually no way to recover the money. Report it to Action Fraud, warn others, and ignore anyone offering to get it back for a fee.
Quick questions
What does locked liquidity mean?
The liquidity is held in a time lock the developer cannot withdraw until a set date, so they cannot pull it before then.
Can a token with locked liquidity still be a scam?
Yes. Developers can still dump large holdings, raise taxes or abandon the project. Locked liquidity reduces one risk; it does not remove them all.
owl.fun is a play-money launchpad where devs really can rug you. Its Owl Eyes panel runs this checklist on every token. Practise there, not with real money.
Keep learning
General safety information, not financial or legal advice. HooTang Clan has no token, and nothing on this page is a reason to buy anything. Report fraud to Action Fraud, or Police Scotland on 101.