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How to spot a rug pull: 8 checks before any new token

A rug pull leaves a token worth almost nothing, often within hours. The good news: many of them leave clues first. Here are 8 checks you can run in a few minutes, and the one thing no check can promise.

Beginner guide · 9-minute read · Updated 2026-10-21

What a rug pull is

A Rug pull is when the people behind a token take the money and leave. Buyers are left holding a coin they can't sell for much, or at all.

It happens in three main ways:

• Pulling the pool. The creator removes the money from the token's trading pool. Now there's nothing to sell into.
• Dumping the supply. Insiders hold a big share and sell it all at once.
• Code traps. The token's code lets people buy but quietly blocks them from selling. This is called a honeypot.

The checks below look for each one.

Before you start: where to look

You'll need two free tools:

• A block explorer. A search site for the blockchain. Etherscan for Ethereum, Solscan for Solana, and similar sites for other chains. Our guide to on-chain data basics walks through one.
• A token scanner. Several free sites read a token's code and flag common risks. Use two, not one. They can be wrong.

Always copy the token's contract address (its unique ID) from a source you trust. Fake copies with the same name are everywhere.

The 8 checks

1. Who holds the supply?

Open the holders list on the block explorer. Add up the top 10 wallets, leaving out the trading pool itself and any known burn address.

If a handful of wallets hold a big share, they control the price. That's the setup for a dump.

2. Is the liquidity locked or burned?

The liquidity pool is the pot of money that lets you trade the token. If the creator can withdraw it, they can pull the rug in one click.

Look for proof the pool tokens are burned (sent to an address nobody controls) or locked in a time lock. A lock that ends next week isn't much of a lock.

3. Can the creator make more tokens?

Some tokens let the creator mint (create) new ones whenever they like. That's an unlimited printer pointed at your share.

On Solana, check that the mint authority is revoked. On Ethereum-style chains, scanners flag a "mint" function the owner can use.

4. Can the creator freeze or block you?

On Solana, a token can carry a freeze authority that lets the creator freeze any wallet. On other chains, look for blacklist functions or owner-only rules about who can sell.

If the creator can stop you selling, that's a honeypot risk. It should be revoked or absent.

5. Has anyone actually sold?

Scroll the token's trade history. You should see plenty of sells from many different wallets, not just buys.

All buys and no sells is one of the loudest warning signs. It can mean the code blocks selling.

6. Is there a high or changeable tax?

Some tokens charge a fee on each buy or sell, set in the code. A 2% tax is one thing. A tax the owner can raise to 99% is a trap.

Scanners usually show the buy and sell tax, and whether the owner can change it.

7. Did the creator's wallet buy early, or in a bundle?

Look at the first buyers. Were many of the first wallets funded from the same source, a minute before launch? That's often one person spread across many wallets.

Also look at the creator's wallet history. Has it launched many tokens before, each one dumped soon after?

8. What's the social story?

The code checks matter most. But the social side has tells too:

• An anonymous team with no history.
• Promises of huge or "guaranteed" returns.
• Urgency: "presale ends tonight", "last chance".
• A chat where questions get deleted or people get banned for asking.
• Copied websites and borrowed logos.

A quick scoring sheet

What the checks can't catch

Here's the honest part. All green doesn't mean safe.

• Burned liquidity stops the creator pulling the pool. It doesn't stop big holders selling into it.
• A spread-out holder list can be one person using many wallets.
• A token can pass every check and still fall 95%, simply because people stop buying.

The checks lower one kind of risk: theft by code. They do nothing about the normal risk that a coin with no business goes to zero. Our memecoins guide explains why that's the usual ending.

If you still go ahead

1. Use only money you can afford to lose entirely.
2. Size it from your risk rules. Our guide on how much to risk per trade shows the math.
3. Use a separate wallet with only that amount in it.
4. Never sign a request you don't understand, and never share your seed phrase. See crypto scams to avoid.

Try it today (no money needed)

1. Pick any new token that's trending today. Copy its contract address.
2. Run the 8 checks and fill in the table above.
3. Come back in a week. Look at the chart. Did the red flags match what happened?

That's a free way to train your eye.

Questions