To research Memecoin rug pull cases, funds usually start with a fiat on-ramp at a centralized exchange. You can complete account opening and KYC through the Binance Official Site or the Official Binance App; if you're on an Apple device that can't install directly, see the iOS Installation Guide. Rug pulls are one of the most common scam formats in the crypto world. According to a Chainalysis 2025 report, Memecoin rug pulls caused roughly 1.1 billion dollars in losses across over 80,000 individual projects in 2024 alone. This article systematically walks through the most representative rug pull cases from 2021-2026 (SafeMoon, Squid Game Token, HAWK Token, Snorter, and others), breaks down the common playbooks (honeypot contracts, LP draining, tax traps, KOL-assisted deception), and offers practical ways to spot them.
The team uses a backdoor in the contract to drain the liquidity pool outright. Typical sequence:
Hard rugs account for about 35% of all Memecoin rug pulls, concentrated mainly on BSC (2021-2022) and smaller chains.
The token contract allows buying but blocks selling (or charges a 99%+ sell tax). Typical sequence:
Honeypot contracts account for about 20% of rug pulls, and are especially common on DEXs.
The team withdraws its LP tokens, draining the base assets (SOL/ETH/BNB, etc.) from the pool. Typical sequence:
Liquidity pulls account for about 30% of rug pulls, and are the crudest, simplest form of exit scam.
Instead of directly attacking the contract, the team gradually sells off its own holdings to crash the price. Typical sequence:
Soft rugs account for about 15% of rug pulls. They're relatively subtle but still inflict heavy losses on retail holders.
SafeMoon was one of the biggest Memecoins ever on BSC, known for "automatic LP growth" and a "reflection mechanism" — every transaction carried a 10% tax, with 5% auto-added to LP and 5% redistributed to existing holders.
But starting in 2022, the SafeMoon team was accused of widespread insider dealing:
SafeMoon's collapse stands as one of the largest wealth-destruction events in Memecoin history.
Squid Game Token launched on the back of Netflix's then-wildly-popular show "Squid Game," with no license from the IP holder. The team claimed a future "on-chain Squid Game" game was coming.
Within 7 days of launch:
After the rug, the official website, Twitter, and Telegram all disappeared. This remains the textbook early example of a Memecoin honeypot contract.
HAWK Token was launched by 22-year-old internet personality Haliey Welch (the "Hawk Tuah girl"). The team behind it, OverHere, was a marketing company that promoted the token through Welch's 15 million TikTok followers.
The rug pull sequence:
Aftermath:
HAWK stands as the defining "celebrity Memecoin cash-out" case of 2024.
Snorter was a Pump.fun token on Solana launched in November 2024. The token's market cap ran from zero to $80 million in six hours, but on-chain analysis from Bubblemaps showed 80% of the supply concentrated in five wallets (suspected to be a multisig controlled by the team).
Within six hours of its peak the price crashed 99%, with the five wallets cashing out roughly $65 million and disappearing.
HEYU was a Memecoin on BSC launched in July 2024. Three days after launch, the team called an ownership-transfer function in the contract, moved ownership to an external address, then minted trillions of new tokens to dump on the market.
Community analysis afterward found a hidden mint function buried in the contract source code, but because the contract was never audited before deployment, the backdoor went unnoticed.
BALD was the hottest Memecoin during Base's early launch period. The team was anonymous, but on-chain sleuths traced a funding link to Alameda Research.
The rug pull sequence:
Aftermath: no entity behind the project has been charged, and the funds were never recovered.
Based on the cases above, common Memecoin rug pull playbooks include:
The team partners with a KOL beforehand (usually paid), and the KOL heavily promotes the token around launch to draw in retail buyers. Examples: HAWK (Haliey Welch), $LIBRA (linked to Argentine president Milei).
Warning sign: a KOL suddenly and heavily promoting a token with weak fundamentals within a short window.
The team uses multiple wallets to trade the token back and forth, manufacturing high volume and an apparent uptrend to lure in momentum buyers.
Warning signs: abnormally high volume paired with a small number of holders; multiple same-size trades in the same time window; counterparty wallets funded from the same source.
The team creates a "you'll miss out" atmosphere. Common tactics:
Warning sign: marketing that includes explicit "gain promises," "deadlines," or "success stories" — most of the time, this is a scam.
The team fakes an "official" affiliation with a celebrity or brand — for example, launching a token using names like Trump or Musk without authorization, or faking a celebrity's Twitter/X link.
Warning sign: the token claims to be "X celebrity's official token" but there's no verified link from the celebrity's actual account; the official website has an odd domain name.
The team claims to be "audited" but in reality:
Warning signs: the audit report link doesn't work; the audit firm is unknown; the audit content doesn't match the actual deployed code.
| Tool | Function |
|---|---|
| Token Sniffer | Automated contract risk scanning |
| Honeypot.is | Honeypot contract detection |
| GoPlus Security | Comprehensive risk assessment |
| Bubblemaps | Holder relationship maps (spotting concentration) |
| Arkham | Wallet labeling |
| RugDoc | Project due-diligence scoring |
| DEXScreener | Liquidity and holder analysis |
| Solidus Labs | Rug pull risk scoring |
In practice, it's best to cross-check with at least 3 tools to avoid a false read from any single one.
If you bought into a rugged Memecoin, here are some things you can do:
First, preserve evidence: screenshot the token page, contract address, transaction hashes, and official announcements (even if since deleted). This evidence may be useful later for legal action or tax filings.
Second, trace on-chain: use Etherscan or Solscan to track where the team's funds went. If the funds are still sitting in a CEX account, you can report it and try to get the exchange to freeze it.
Third, consider legal action: if the loss is significant (over $10,000), consider joining a class-action suit. Multiple law firms in the US and EU specialize in crypto fraud cases.
Fourth, claim a tax deduction: rug pull losses can be reported as capital losses and partially offset taxable income. See our article "Do You Have to Pay Taxes on Memecoin Investments" for more detail.
Fifth, warn others: share your experience on Twitter/X, Reddit, and in communities to help others avoid the same scam. But be careful not to cross into defamation.
Q: Do all Memecoins eventually rug pull?
No. About 90% of Memecoins go to zero within 1-3 months, but only around 30-40% of those are actually "malicious rug pulls." The rest go to zero because the community dies off, there's no real use case, or market attention simply moves on.
Q: Do rug pull teams ever get caught?
A few do, but most don't. The ones that get caught are usually large-scale rugs (losses over $100 million) where the team's real identity gets exposed. Small and mid-size rugs (under $10 million) are usually never pursued.
Q: Can rugged funds ever be recovered?
Rarely. Rug pull funds usually get laundered through Tornado Cash, cross-chain bridges, and multiple CEX hops, making on-chain tracing difficult. Even when funds are traced to a CEX account, most are registered under fake identities and can't be frozen. Statistics show under 5% of rugged funds are ever recovered.
Q: How do you avoid buying into a rug pull Memecoin?
Four core principles: 1) check the contract (no mint/pause functions); 2) check holder concentration (top 10 under 30%); 3) confirm LP is locked (permanently burned is best); 4) research the team (KYC'd with a public identity is best). See our article "How to Spot a DeFi Project Rug Pull" for more detail.
Q: Do Pump.fun tokens rug pull?
Pump.fun's mechanism (automatic LP burn) makes "hard rugs" less likely. But soft rugs (the team dumping concentrated holdings) remain a real risk. About 98% of Pump.fun tokens go to zero within hours.
Q: Can tokens listed on a CEX still rug pull?
The odds are lower but not zero. Major CEXs like Binance and Coinbase do due diligence before listing, but there have still been projects that went to zero after listing (FTT, CEL, Squid Game V2, and others). CEX listing lowers hard-rug risk, but it can't eliminate the risk of an economic model collapsing or a team dumping its holdings.
Q: Can a rugged project ever come back?
Rarely. SafeMoon tried a community-led relaunch after its 2024 bankruptcy, but its value settled at roughly 0.01% of its original level. Most rugged projects never recover.
Q: Can rug pull losses be reported for tax purposes?
Yes. In the US you can file it as a "capital loss" or "theft loss." You'll need to keep transaction records and evidence of the rug pull. Up to $3,000 in taxable income can be offset per year, with the remainder carried forward.
Q: What's the typical profile of someone who gets rugged?
Based on on-chain analysis, victims of rug pulls tend to be: 1) newcomers (wallet active for under 6 months); 2) small position sizes ($500-$5,000); 3) came in via social media; 4) got burned multiple times but kept participating (an addictive pattern).
Q: Is there any legal recourse for Memecoin rug pulls in mainland China?
Very limited. Mainland China bans crypto trading, and related contracts aren't legally protected. Even if you're scammed, you generally can't report it to police for restitution, since the underlying assets are considered "illegal." This site strongly advises mainland users not to participate in Memecoins.
Chainalysis 2025 Crypto Crime Report, the Solidus Labs Memecoin database, CertiK's 2024 security report, Etherscan, BSCscan, Solscan, Bubblemaps, and media coverage of individual rug pull events (CoinDesk, The Block, Decrypt, and others).