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Honeypot token
A honeypot token is a scam token whose smart contract (the code that runs the token) lets people buy it but blocks or restricts selling or transferring it. The price chart can look healthy because buyers cannot get out, while the creator can.
What it means for you. Being able to buy a token proves nothing about being able to sell it. Before buying, check that the contract address matches the one the project itself publishes, and look for evidence that ordinary holders have sold. Money spent on a honeypot token is usually lost, and a wallet showing a balance does not mean that balance can be sold.
Sources: ethereum.org: How to identify scam tokens, arXiv: An Analysis of Trapdoor Tokens on Uniswap (Huynh et al.) · checked 4 October 2026
Rug pull
A rug pull is when the people behind a crypto project suddenly take the money out and leave. A common form: the creators withdraw the funds backing a token's trading pool, or sell their own large holdings, so the price collapses and other holders are left with tokens that can barely be sold.
What it means for you. A claim that a project's liquidity is "locked" is only a claim until you can see the lock on chain; in one SEC case the tokens said to be locked were not. Check who controls the liquidity-pool tokens and how much of the supply a few wallets hold. Funds taken in a rug pull move on chain and are rarely recovered.
Sources: SEC: Litigation release LR-26223 (Game Coin rug pull), ethereum.org: How to identify scam tokens · checked 4 October 2026