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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
Pump and dump
A pump and dump is a scheme where organizers hype a little-known coin to push its price up quickly (the pump), then sell their own holdings into that buying (the dump). The price usually falls as fast as it rose, leaving late buyers with losses.
What it means for you. Countdown messages in chat groups, sudden spikes in a thinly traded coin, and stories about a famous backer are the signs regulators list. The organizers have usually bought before the announcement, so anyone buying on the signal is buying from them. Coins with little trading can be hard to sell at the shown price once the selling starts.
Source: CFTC: Customer advisory, beware virtual currency pump-and-dump schemes · checked 4 October 2026