How to Avoid ‘Rug Pulls,’ the Latest Cryptocurrency Scam

How to Avoid ‘Rug Pulls,’ the Latest Cryptocurrency Scam
The file photo shows bitcoin tokens in Sandy, Utah on April 3, 2013. Rick Bowmer/AP Photo
The Associated Press
Updated:

A new type of scam has emerged in the hype-filled world of cryptocurrency: the “rug pull.”

The scam, which gets its name from the expression “pulling the rug out,” involves a developer attracting investors to a new cryptocurrency project, then pulling out before the project is built, leaving investors with a worthless currency. It’s part of a long history of investment schemes.