Rug pull
A rug pull describes a situation in which the value behind a token suddenly disappears, for example because the liquidity is withdrawn all at once. What remains is a token with no meaningful value. Whether a price fall is a rug pull or ordinary market movement can be established afterwards, not at the moment itself.
What it may indicate
A token whose value falls away from one moment to the next can be an indication that the party behind it has withdrawn with the funds put in. It can also be a project that failed for other reasons. The distinction lies in where the liquidity went.
What is a rug pull?
A situation in which the value behind a token suddenly disappears, often because liquidity is withdrawn at once, leaving a token without meaningful value.
How do you tell a rug pull from a failed project?
The distinction lies in where the liquidity went. Following the withdrawn funds shows whether there was intent or an ordinary failure.
Who carries out a rug pull?
Usually a party with authority over the token or over the liquidity. Who that was can sometimes be derived from the contract data and the transactions, and sometimes not.
Is a rug pull a criminal offence?
The actual course of events determines whether an offence has been committed. That is a legal judgement. A report records what happened and by which means.
What can you record after a rug pull?
The contract address of the token, your own purchase transactions, the moment selling became impossible, and the addresses the liquidity disappeared to.
See also
Your own situation
If you are reading this, you probably have a question about your own situation. That is exactly what Paucitas does.
The first step is contact by phone. We prefer to schedule that call through WhatsApp, so you do not have to wait. In the call we look together at what can factually be established in your case and what Paucitas can examine for you.