A rug pull is a scam where the creators of a cryptocurrency or token suddenly abandon the project and disappear, often taking investors' money with them. The name comes from the idea of pulling a rug out from under someone. Rug pulls leave investors with worthless tokens and no way to recover their money.
A new cryptocurrency project launches and attracts 10,000 investors who collectively put in $5 million. After a few weeks, the creators withdraw all the money from the project's accounts and stop communicating. The tokens become worthless, and investors have no recourse to recover their funds.
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