Rug Pull Epidemic: Crypto Scammers Pocket Billions as Empathy Goes Extinct
Crypto’s wild west era shows no signs of ending—while regulators nap at the wheel, fraudsters are cashing in harder than a Wall Street banker during bonus season.
How rug pulls became the DeFi sector’s twisted growth metric
The ’exit scam’ has evolved from amateur-hour theft to professionalized operations. Today’s perpetrators deploy flawless English, fake KYC badges, and even staged VC partnerships—all before vanishing with nine-figure sums. Auditors? Useless. Community warnings? Drowned out by shill armies. The only thing rising faster than Bitcoin’s hash rate is the sophistication of these heists.
When accountability dissolves faster than a shitcoin’s liquidity pool
Victims range from greedy degens to pension funds—proving once again that in crypto, the greater fool theory isn’t just alive; it’s getting MBA-level upgrades. Meanwhile, the usual suspects (looking at you, ’anonymous teams’) keep recycling the same playbook: hype, delay, ghost. Rinse and repeat until the SEC sends a strongly worded tweet.
The irony? These scams are the most consistent performers in Web3—pioneering true ’zero-to-zero’ returns with Swiss-clock precision. Maybe we should start tracking them as a separate market index.
Rug pulls: The perfect crime for the unfazed
Van Zeller interviewed several victims, including one named Xavier, who admits, “I think I’ve been in maybe seven or eight rug pulls. The first time it was just a $500 investment. Then the next one, almost $10,000.”
She asked what he did to recover his losses? His answer: “You just MOVE on. There’s nothing you can do. Decentralized financing. So, there are no rules, nothing applies.”
That statement tells you everything you need to know about why rug pulls are still a thing, even though we have known about them for as long as Bitcoin has been around.
How do rug pulls work? Scammers create a token, load up on it early at dirt-cheap prices, and then blitz the market across every social platform. They use paid shills on X, Telegram, Reddit, and YouTube to pump the price.
Unsuspecting investors jump in, thinking they’re catching the next Bitcoin. Then, the creators vanish, cashing out while the token collapses, leaving everyone else holding worthless digital bags. According to the FBI, rug pulls now account for 37% of illicit crypto revenue.
Pulling everything beyond rugs
Records from the California Department of Financial Protection and Innovation show a disheartening 372 entries of fraudulent activities.
In the top most entry, submitted in the US, a 68-year-old man lost over $565,000 after a suspicious transaction from Coinbase into his checking account vanished.
In California, a family member was scammed on WhatsApp after being lured into a fake crypto platform, Goomarket LLC. He was tricked into thinking he made $5.3 million. But when he tried to withdraw, the platform demanded taxes. He paid. Then came more demands, for money laundering clearance. Eventually, he realized he’d lost $540,000, and the website vanished.
“We don’t care”: the scammer mindset
In van Zeller’s documentary, she interviews three masked scammers who refer to rug pulls as a “legal way of stealing.” One, calling himself Mr. X, boasts: “You just got to get it. We don’t care.”
She presses him about the people who lost their life savings, some gave up their homes, some committed suicide, and others sacrificed retirement funds
“If you are going to invest your life savings in a coin, you should take five minutes to do a Google search … they are the most stupid people on earth,” Mr X reckoned.
This, right here, is the dark heart of the modern fraud economy: callous, confident, and utterly devoid of empathy.
Crypto index fund Bitwise says Q4 2024 will be remembered as “one of the most important in crypto’s history.” Unfortunately, it might also be the moment fraud truly scaled. As John Wilson of Forta notes, “phishers and scammers are nothing if not opportunistic.”
