Kanye West Rejected a $2 Million Crypto Scam—Understanding Rug Pulls and How to Avoid Them

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In February 2025, Kanye West (Ye) revealed that he rejected a $2 million offer to promote a fraudulent cryptocurrency scheme. The plan was simple: scammers wanted him to endorse a fake “Ye” token, keep the promotional post up for eight hours to attract investors, and then claim his account had been hacked to avoid backlash. The scammers openly admitted their goal was to steal millions from the public. However, Kanye refused, stating he had no interest in misleading his fans for financial gain.

This incident highlights a growing problem in the crypto space—rug pulls, a deceptive practice where developers or promoters artificially inflate the value of a cryptocurrency before abandoning the project and running off with investors’ funds. While Kanye West refused to participate in such a scheme, many other influencers have unknowingly (or knowingly) promoted fraudulent projects, leaving investors with massive losses.

In this article, we’ll explore what crypto rug pulling is, how to identify red flags, and how to avoid falling victim to scams like the one Kanye rejected.

What Is Crypto Rug Pulling?

A rug pull is a type of cryptocurrency scam in which developers or insiders manipulate a token’s value to attract investors and then disappear with the funds. The term comes from the phrase “pulling the rug out from under someone,” meaning a sudden collapse or betrayal.

Types of Rug Pulls

1. Liquidity Theft – Developers launch a new token and create a liquidity pool on a decentralized exchange (DEX) like Uniswap or PancakeSwap. After attracting enough liquidity from investors, they withdraw all the funds, making the token worthless.

2. Pump-and-Dump – Developers or insiders accumulate large amounts of a token, hype it up through marketing and influencers, and then sell their holdings at peak prices, crashing the token’s value.

3. Malicious Smart Contracts – Some projects use hidden code in their smart contracts to restrict selling, allowing only the developers to withdraw funds while locking investors out.

Real-Life Examples of Crypto Rug Pulls

• Squid Game Token (SQUID) Scam – In 2021, the Squid Game-themed cryptocurrency skyrocketed in value before developers suddenly withdrew all liquidity, stealing over $3 million from investors.

• Frosties NFT Rug Pull – A fraudulent NFT project where developers disappeared after raising $1.1 million from unsuspecting buyers.

How to Avoid Rug Pulls

Kanye West’s rejection of a rug pull proposal shows how scammers target influencers to lure in investors. However, there are ways to protect yourself from falling victim to these schemes.

1. Research the Team

• Always check if the developers are publicly known and have a track record of successful projects.

• Be wary of fully anonymous teams.

2. Check for Liquidity Locks

• Projects that lock liquidity for a specific period are safer since developers can’t suddenly withdraw all funds.

3. Read the Smart Contract Code

• If possible, audit the contract or rely on trusted blockchain security firms like CertiK to analyze it for hidden vulnerabilities.

4. Watch Out for Overhyped Promotions

• Avoid projects that rely heavily on celebrity endorsements rather than real technical development.

5. Verify Token Distribution

• If a few wallets hold the majority of tokens, the risk of a rug pull is high since those holders can crash the price by selling their stake.

Final Thoughts

The crypto space is filled with both opportunities and risks. Kanye West’s refusal to take part in a $2 million rug pull scam serves as a reminder that scams often use influencers to create artificial trust and excitement. By conducting thorough research, avoiding hype-driven projects, and not blindly trusting celebrity endorsements, investors can better protect themselves from financial losses.

If a project lacks transparency, makes unrealistic promises, or relies on deception, it’s best to stay far away.