Technology & Finance
NewsOnScale Staff
October 28, 2026
A rug pull is simple. A developer launches a token. They generate hype. Investors buy in. The price rises. Then the developer removes all liquidity from the pool in a single transaction — sometimes in under one second — and the price collapses to zero. The developer disappears with the money. The investors are left holding worthless tokens.
In 2026 this happened 1,247 documented times. It cost investors $2.8 billion. It accounted for 37% of all DeFi-related losses this year.
Nobody knows the real number because nobody is counting it correctly.
The scale nobody is reporting
Chainalysis put total crypto scam losses near $17 billion for 2026 without isolating rug pulls as a category. CertiK tallied over $1.3 billion lost across 344 incidents in the first half of the year alone. On PancakeSwap V2 — one exchange on one blockchain — $569 million was extracted through 103,695 separate rug pulls in just the first 20 weeks of 2026.
103,695 rug pulls on one exchange in 20 weeks. That is roughly 740 rug pulls per day on one platform.
The median loss per rug pull is approximately $2,800. That number obscures what is actually happening. The median is small because most rugs are small — a few thousand dollars extracted from a handful of buyers before the token collapses. The damage comes from volume and from the occasional large extraction that skews the total.
83% of rug pulls in 2026 followed the same pattern: developer removes all liquidity in one or two transactions, price collapses to zero within one block, developer disappears. Average lifespan from launch to exit: 3.7 days.
How the launchpad became the factory floor
The memecoin launchpad industrialized rug pulling. Before launchpads a rug pull required technical knowledge — deploying a smart contract, seeding a liquidity pool, managing the timing of the exit. That created friction that limited the volume of fraud.
Launchpads eliminated the friction. Now anyone can launch a token in minutes with no technical knowledge. The launchpad handles the contract deployment. The launchpad handles the liquidity. The launchpad earns a fee on every launch — whether that token rugs or not.
This is the fundamental misalignment in the launchpad model. The platform earns revenue from every token created. The platform has no financial incentive to prevent bad actors from launching because bad actors pay the same fees as legitimate projects. The platform's business model is volume. Volume includes fraud.
The bonding curve alternative
A bonding curve changes the incentive structure fundamentally. In a bonding curve model liquidity is not controlled by the token creator. It is managed by the contract itself — locked into a mathematical curve that determines price based on supply and demand. The creator cannot drain the liquidity because the creator never controlled the liquidity in the first place.
When a token built on a bonding curve reaches a graduation threshold — a predetermined market cap target — the liquidity moves automatically to a decentralized exchange through the contract mechanism. Not through the creator's wallet. Not through a multisig the developer controls. Through the contract.
This does not eliminate all risk in the meme coin space. It eliminates the specific mechanism through which 83% of rug pulls in 2026 occurred — the developer draining a liquidity pool they control.
What accountability actually looks like
Beyond the technical mechanism the other factor that distinguishes legitimate launchpads from extraction operations is accountability.
Most rug pulls succeed because the developer is anonymous. A wallet address. A Telegram handle. A Twitter account created two weeks before the launch and deleted two weeks after. There is no face. No name. No phone number. No legal entity. No documented history. Nothing to trace and nothing to lose.
A launchpad operated by someone whose name is on a federal lawsuit, whose FEC filing is public record, whose cell phone number is posted publicly for any user with a problem to call, whose 2028 presidential campaign depends on the integrity of every product he operates — is a structurally different accountability environment than an anonymous wallet.
The accountability is not just technical. It is personal. Reputational. Political. Legal.
Harming the community on a platform like that does not just result in a lost wallet. It ends a campaign. It becomes evidence in active federal litigation. It becomes a NewsOnScale article. It becomes part of a documented public record that follows the operator permanently.
That is what genuine accountability looks like in a space where accountability has been almost entirely absent.
Who is getting arrested
Almost nobody. A rug pull can be prosecuted as fraud, unregistered securities sales, or racketeering. Recovery is rare because the deployer is usually anonymous and the proceeds are laundered through mixers before law enforcement can act.
The FBI's Internet Crime Complaint Center aggregates individual complaints — individual $2,800 losses that no one would investigate alone become a case worth building when a hundred of them point at the same contract deployer. That aggregation has produced some enforcement actions. Not many.
$2.8 billion stolen in 2026. 1,247 documented incidents. A handful of prosecutions. The median outcome for a rug pull victim remains total loss with no recourse.
What investors can do
Before buying any token on any launchpad: verify whether the liquidity is controlled by the developer or locked in a contract mechanism. Check whether the developer is identifiable — a name, a documented history, a legal entity, a reachable contact. Check on-chain data for wallet concentration — if one or two wallets hold the majority of the token supply the risk of a coordinated dump is significant. Check the liquidity depth — thin liquidity means large orders move the price dramatically and exit can be difficult.
None of these checks guarantee safety. They eliminate the most obvious extraction setups.
The $2.8 billion lost in 2026 was not lost to sophisticated financial engineering. It was lost to the same mechanism repeated 1,247 times — a developer controlling liquidity they could drain, operating anonymously, with no accountability and no consequences.
The solution is not more complex. It is structural accountability — in the contract and in the people who operate the platform.
NewsOnScale is owned by AMILLI AI, Corp., founded by JJ Johnson. JJ Johnson is a declared 2028 presidential candidate. FEC filing: JJJOHNSON2028.