Chapter 9
Rug pulls and junk coins
What you'll get from this chapter: How rug pulls and pump-and-dump schemes work, how large crypto scam losses have become, and four checks before you buy any new coin.
In this chapter
- Words in this chapter
- Your steps
A new token (a type of cryptocurrency) with a hidden team and a promise of enormous gains is arranged so that you can lose the entire amount.
A is a project whose creators pull out the (the money that lets people buy and sell the coin) and then disappear. A feeds on the same hunger: insiders hype a coin until the chart only goes up, then sell, and the price collapses.
Scam wallets tracked on the (the public record of crypto transactions) received at least $14 billion in 2025, and Chainalysis, a firm that traces those transactions, projects the full total could exceed $17 billion. Impersonation scams grew more than 1,400%. The average scam payment rose from $782 to $2,764.¹
The biggest crypto losses do not come from coins at all. They come from a friendship. The next chapter explains .
Words in this chapter
- . A cryptocurrency project that takes investors’ money and disappears, often by removing the trading pool so the token cannot be sold.
- . The shared public record of every transaction for a cryptocurrency. Once a payment is recorded there, it cannot be reversed.
- . In crypto, the pool of money that lets people buy and sell a coin. In a rug pull, the creators pull it out and the coin can no longer be sold.
- . A cryptocurrency created as a joke or for hype, with no business or product behind it.
- . Free tokens that appear in your wallet, or that a website offers to send you. A surprise airdrop is often bait for a scam.
- . A public website, such as Etherscan, that lets anyone look up a wallet address, a transaction, or a token’s contract address on the blockchain.
Your steps
Sources
¹ Chainalysis, "2026 Crypto Crime Report: Scams" (January 13, 2026). https://www.chainalysis.com/blog/crypto-scams-2026/