Spotting a rug: 7 red flags
A rug pull is when the people behind a token take the money and leave holders with something that can't be sold. It can be fast (liquidity pulled an hour after launch) or slow (insiders quietly selling into every pump for weeks).
No single sign proves a rug. Plenty of honest projects trip one or two of these. But when several show up together, the odds are not on your side.
1. The team can still mint tokens
If the mint authority is active, someone can create new supply at any time and sell it into the pool. On Solana this is easy to check, and Coin Check shows it on every report.
2. The team can freeze accounts
An active freeze authority lets someone freeze holders' token accounts. A frozen account can't sell. There are rare legitimate reasons for it, but on a memecoin it's a serious warning.
3. Liquidity is tiny compared with the hype
A coin with thousands of posts and a few thousand dollars in its pool is a coin that a handful of sellers can crash. See what liquidity means.
4. A few wallets hold most of the supply
If the ten largest wallets (leaving out the pool itself) hold a big share, they can dump on everyone else. Watch for clusters of wallets funded from the same source just before launch. A block explorer will show you where each wallet's first SOL came from.
5. Lots of buys, no sells
Hundreds of buys in a day and zero sells usually means something is stopping people from selling. These traps are called honeypots. Coin Check flags this pattern.
6. The pitch promises returns
"Guaranteed", "100x", "can't lose", "the next big one". Real projects talk about what they're building. Scams talk about what you'll earn. In the UK, promoting crypto with promises like these is also against the financial promotion rules.
7. Pressure and secrecy
Countdown timers, "last chance", private groups where you must buy before you're allowed to ask questions, admins deleting critical comments. Anything designed to stop you thinking is a red flag in its own right.
What to do if you spot them
Walk away. There will always be another coin. If you've already bought and the warning signs stack up, decide calmly whether to sell what you can, rather than hoping. Never send anyone your seed phrase or "connect to verify" on a site you were sent in a DM: that's how most wallets are drained.
A clean report doesn't make a coin safe. These checks catch common tricks, not every trick.
Not financial advice. This guide is general education. Crypto assets are high risk and largely unregulated in the UK; you could lose everything you put in.