Ragpur is a related threat in cryptocurrency landscapes, particularly decentralized finance. Crypto lagpur is a fraudulent situation that has a major negative impact on individual investors as well as the overall crypto market. Therefore, it is relevant that all investors and crypto enthusiasts need to have a comprehensive understanding of the role and impact of lagpur in the crypto market.
This article will help you clear all your questions about crypto-rag pull. This article explains cryptographic lag pulls, how it works, their different types, examples, and different ways to avoid cryptographic lag pulls.
Crypto lag pull
Crypto Rug Pull is a crypto landscape scenario and an exit scam where project founders and malicious developers exaggerate the project, impress investors, and abandon the project with investment funds. The term “Crypto rug pull” came from the phrase “pull the rug from under you.”
California Department of Justice Warn investors about crypto frauds, including lagpur, and highlight the common red flags to avoid.
Crypto Rug Pull includes a team that increases assets from the public by trading digital assets.
The main purpose of Crypto Lagpur is to trick investors by attracting investors to the project and quickly disappearing, including investors. Overall, its central purpose is to create illegal scenarios that benefit developers at the expense of ignorant or innocent investors.
How does Crypto Rug work?
Crypto lags bring out work by exploiting trust and hype within Defi Landscape, especially in Defi exchanges where developers can easily list coins and perform unregulated operations.
Victim developers create new tokens and provide aggressive promotions via influencers, social media or misleading marketing, increasing interest in tokens.
Consumer financial protection Bureau (CFPB) We report a sharp increase in crypto assets complaints, noting that frauds like lags pull as the main cause of loss.
>> Top 5 biggest crypto fraud in history (you can I’d like to know more about this, please click here)
When demand for tokens and the number of investors rose in the crypto market, fraudulent developers of the project achieved a planned exit strategy. The developer then disappears with stolen money and rarely moves it to an unspecified wallet, making it extremely difficult to track.
Types of Cryptographic Rug Pulls
Crypto lag pulls are divided into four main types: liquidity pulls, pumps and dumps, fake projects and team exits.
Team exit: The project’s team members immediately came out or disappeared, ceased participants without assistance and destroyed the coin.
Fake Project: Fraudulent developers develop legal projects, accumulate engagement, disappear with digital tokens, and stop participating with valuable coins.
Fluidity pull: Liquidity pull is the most common type of cryptographic lag pull, focusing primarily on decentralized exchanges. In this type of scam, fraudulent developers add new coins to their DEX and link them with popular crypto tokens such as Ethereum. It then highly promotes the coin, provides investments in liquidity pools, and increases the value of the coin. Once the coin’s value reaches a peak level, the fraudulent developer will withdraw the entire ETH from the pool, preventing other investors from recapturing the funds.
Pumps and dumps: In this type of crypto lag pull, the scammer artificially inflates the coin price via a tuned purchase, selling the holdings at the top, causing the value to crash.
US Government Report on Illegal Finance Describe the challenges law enforcement faces when defining and investigating rug pulls.
Famous Cryptographic Rugs Pull
In the crypto market, Crypto Rugpulls is one of the major issues that bring significant losses to investors. Last year, the Crypto market encountered a loss of about $500 million from Crypto lag pull. Below are some of the biggest crypto lag pulls:
Squid Game: The new token arrived at a market named Squid due to the popularity of the game “Squid Game”. The first Squid sold at $0.01, and within a few days the price rose to $2,861.
The issue was identified when investors discovered they were unable to sell tokens, some of whom began researching and realised that the project developer had disappeared from all important platforms, such as LinkedIn. Investor concerns posted on Twitter have been blocked, and apps like Discord Group and Telegram have also been closed. As a result, the token value immediately fell 99% within a week. The investors were left with unworthy coins, and from Ragpur, the project developer won over $3.38 million.
onecoin: In In 2014, Onecoin was introduced by Ruja Ignatova in collaboration with Sebastian Greenwood. The coin was sold as an innovative digital asset and was treated as a Ponzi scheme due to its solid structure. The main business associated with ONECOIN is selling educational materials for cryptocurrency trading, and investors can purchase these packages from anywhere, worth 118,000 euros.
Due to heavy marketing and flashy events, the scam spread instantly to over 175 countries. In 2017, a US warrant was filed to help Ruja Ignatova arrest, and she disappeared. As a result, most of the company’s workers were arrested because she went missing. Currently, Ruja is on the FBI’s 10 most wanted lists, and her partner, Sebastian Greenwood, was arrested in 2017. He was jailed for 20 years in a role in the scheme.
BitConnect: BitConnect is one of the most infamous lag pulls and was introduced in 2016. In the case of BitConnectCoin (BCC), investors traded Bitcoin, received large returns, and guaranteed a return of up to 40% each month. Assertive marketing efforts have impressed more investors, with its value reaching more than $400 million in 2017. Technologies such as volatility software and BitConnect trading bots were later proven to be schemes. This led to a platform shutdown and a related crash in the value of the BCC token (which was about 92%), which investors abandoned in losses. The developers have won over $2 billion from the scheme.
In the case of one implementation, US Immigration Customs Enforcement (ICE) After doing a lag pull on an NFT project, I charged two developers to launder money.
How to avoid cryptographic lag pull?
Crypto lagpur is considered one of the major threats in the crypto market. Therefore, to protect funds from these types of fraud, investors should do deep research and pay attention before investing in cryptocurrencies. Below are various ways to avoid cryptographic lag pull.
- Invest in legitimate and reliable projects and always remember that trustworthy crypto projects will not be visible for just one night.
- Do in-depth research into the projects you are investing in and see if other projects are gradually launched.
- Check if the selected project has an accurate, clear vision and includes a viable roadmap.
- Make sure you have selected a project with a critical use case that is considered a major selling point. Most of the lagpurs do not have use cases. Instead, there are only sills that can be obtained through paid celebrity promotions.
- Effectively understand underlying blockchain technology, smart contract performance and consensus mechanisms.
After recognizing the losses caused by crypto-rag pull, users can report on their tax returns by explaining the difference between the amount invested in the token and what they earned as capital loss. Investors can then use the loss to offset their potential economic benefits.
Also Read: The Secure Cryptocurrency Wallet
Keep alerts: Protect yourself from the tugs of crypto lags before it’s too late
Ragpur is a related negative scenario in the crypto market, and is particularly popular on the Defi platform. It causes high economic losses for investors and also destroys perceptions of the broader crypto market. Therefore, investors need to be more cautious while investing in crypto projects.
This article provides comprehensive information about cryptographic lagpur and its potential properties. It is important for investors to understand these concepts and maintain healthy skepticism to reduce the difficulties of victims of crypto-ragpur.
