The Five Worst Crypto Rug Pulls Of All Time

Crypto innovation has introduced revolutionary tools for finance and ownership, but it has also given rise to some of the most notorious frauds in financial history. Among these, crypto rug pulls stand out as a devastating form of exit scam, often leaving investors with worthless tokens and no recourse.

While thousands of scams have quietly disappeared, a handful have left lasting marks on the industry due to their scale, visibility, and the level of public trust they violated.

This article breaks down five of history’s most infamous crypto rug pulls and why they still matter today.

What is a rug pull in crypto?

In crypto, a rug pull occurs when developers or project founders suddenly remove liquidity or vanish with user funds after hyping their product. This is especially common in decentralized finance (DeFi), NFT collections, and low-liquidity token launches.

Rug pulls typically fall into two categories:

• Liquidity rug pulls: Developers withdraw all liquidity from the pool, making it impossible for users to sell.

• Project abandonment: Teams raise funds through token sales or presales, only to disappear before delivering a working product.

The combination of crypto anonymity, limited regulation, and fast-moving hype cycles has made crypto rug pulls one of the most widespread forms of fraud in the space.

OneCoin: The $4billion crypto mirage

Launched in 2014 by the self-proclaimed ‘Cryptoqueen’ Ruja Ignatova, OneCoin marketed itself as a revolutionary global finance solution.

Instead, it was a sprawling Ponzi scheme operating without a legitimate blockchain. The project used a centralized database while claiming to be a decentralized cryptocurrency.

Investors were sold educational packages containing OneCoin tokens, which were pitched as assets destined to rise in value. In reality, the business model relied on multi-level marketing, incentivizing users to recruit others into the scheme.

Despite early warnings from regulators and blockchain experts, OneCoin managed to raise over $4bn from victims in more than 175 countries. Ignatova disappeared in 2017, just before US authorities issued a warrant for her arrest. She remains at large and has been added to the FBI’s Most Wanted list. However, the co-founder was sentenced by the United States Department of Justice (DOJ).

Thodex: When a whole exchange vanished

In April 2021, Turkish crypto exchange Thodex abruptly froze customer withdrawals and halted all trading. Within days, its founder and CEO, Faruk Fatih Ozer, fled the country, allegedly absconding with $2bn in user funds.

Thodex had been seen as a legitimate platform, securing major sponsorships and attracting traders with aggressive promotional offers, including Dogecoin giveaways. Behind the scenes, however, the exchange lacked sufficient reserves and was mismanaging customer assets.

Nearly 400,000 users were affected. The case became a national scandal in Turkey, prompting widespread outrage and regulatory scrutiny. Ozer was eventually captured abroad, extradited to Turkey, and sentenced to over 11,000 years in prison in 2023 alongside other company executives.

BitConnect: A top-10 coin with a top-tier scam

BitConnect, launched in 2016, promoted itself as a lending platform that delivered daily profits through a proprietary ‘trading bot’. The bot allegedly generated up to 1% daily returns — returns that compounded rapidly and drew in waves of retail investors.

Its native token, BCC, surged to the top 10 cryptocurrencies by market cap, peaking at a valuation of over $2.5bn. BitConnect hosted lavish global conferences and enlisted a growing number of influencers to spread the message.

However, no evidence of the trading bot ever emerged. By late 2017, regulatory agencies began issuing warnings. In January 2018, BitConnect shut down its exchange and lending services, and BCC’s price collapsed by more than 90% in a single day.

The platform’s dramatic rise and collapse gave birth to one of crypto’s most infamous memes: the ‘BitConnect Guy’, whose over-the-top conference performance became a viral symbol of the hype-driven mania. Lawsuits and criminal cases followed, and BitConnect remains one of the most referenced crypto rug pulls to date.

FTX: The collapse that shook crypto to its core

FTX was once hailed as a pillar of trust in the crypto space. Founded by Sam Bankman-Fried, the exchange earned backing from Silicon Valley firms, won over retail users, and became a brand synonymous with legitimacy.

Behind that success was a massive fraud. Investigators later revealed that FTX had secretly used billions in customer deposits to fund Alameda Research, its sister hedge fund. Alameda used the funds for high-risk trading with little to no accounting oversight.

When the financial black hole was exposed in November 2022, FTX collapsed almost overnight. At the time of its bankruptcy filing, the exchange owed over $8bn to users. Court documents exposed systemic fraud, sloppy recordkeeping, and misuse of customer funds on a scale few imagined.

Sam Bankman-Fried was convicted of fraud and sentenced to 25 years in prison in 2023. The ripple effects of FTX’s downfall are still being felt across the crypto ecosystem. It led to renewed scrutiny of exchange operations and prompted calls for stricter global regulation.

Projects like Solana, which had deep ties to Alameda, suffered collateral damage. Market fears around large SOL liquidations created panic among holders, causing prices to tumble.

Squid Game token: Pop culture meets crypto rug pull

Capitalizing on the massive popularity of Netflix’s Squid Game, an anonymous team launched the SQUID token in October 2021. It quickly gained viral traction, fueled by media coverage and FOMO.

The token surged from mere cents to over $2,800 in days. However, buyers soon discovered they couldn’t sell. The smart contract contained anti-sell functions that prevented holders from exiting positions.

Once the price peaked, the developers drained the liquidity and disappeared, making off with an estimated $3.3m. The project’s website, whitepaper, and social channels were deleted within hours.

Unlike other scams rooted in financial mechanics, the Squid Game token leveraged pop culture and meme virality to draw attention, proving how dangerous hype without fundamentals can result in crypto rug pulls.

Final thoughts

Crypto’s Wild West era has created space for groundbreaking technology and devastating fraud. These five crypto rug pulls are stark reminders of what can happen when hype outpaces due diligence.

If you’re navigating the crypto space, remember: if it sounds too good to be true, it probably is. Check the code, verify the team, and always DYOR – do your own research.