rug pull

An exit scam or rug pull is a confidence trick, con job or fraud, perpetuated under the guise of a legitimate business, that ends when the originator absconds with the funds contributed by participants. When a business entity pulls the rug and stops shipping orders while receiving payment for new orders, it could take some time before it is widely recognized that orders are not shipping. The entity can then make off with the money paid for unshipped orders. Customers who trusted the business do not realize that orders are not being fulfilled until the business has already disappeared. Exit scams are commonly associated with the rise of cryptocurrency projects due to the lack of regulation and decentralized ecosystem.
The best-known examples are online sellers where the buyer does not know the real identity or physical location of the scammer and therefore has little recourse. Payments to darknet markets are usually made in cryptocurrencies such as bitcoin or monero, where payments are irreversible and cannot be recovered through a chargeback.
Exit scams are frequently perpetrated on illegal darknet markets. While the most common such schemes are perpetrated by individual vendors who receive payment for the product they have no intention of shipping, such scams have also been perpetrated both by individual procurers who obtain the product which they have no intention of paying for, and by operators or administrators of these markets who, by shutting down an entire market, can abscond with whatever currency the market was holding on behalf of buyers and sellers in escrow at the time of the shutdown. Regardless of who is perpetrating the scam, if the cheated parties are themselves knowingly participating in illegal activities, it is not usually a viable option to notify law enforcement.

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