Crypto Scam Glossary
Definitions of common red flags and scam terminology used in our crypto project analysis.
When developers abandon a project and disappear with investors' funds, typically by draining a liquidity pool or selling off a large allocation of team tokens.
A malicious smart contract that allows users to buy a token but not sell it. The code contains a hidden trap that prevents selling, effectively locking up investors' money forever.
A scheme to artificially inflate a token's price through coordinated hype and false marketing. Once the price is high, the organizers ("pumpers") sell their holdings, causing the price to crash and leaving new investors with worthless tokens.
The founders and developers of a project are not publicly known or verifiable. This lack of accountability is a major red flag, as it allows the team to disappear without consequence.
The project's smart contracts have not been reviewed by a reputable third-party security firm. This means the code could contain critical vulnerabilities, backdoors, or malicious functions.
A function in the smart contract that allows the project owners to create an infinite number of new tokens. This can be used to hyper-inflate the supply and devalue all existing tokens.
The project owners have special administrative privileges over the smart contract, such as the ability to pause trading, blacklist wallets, or change fees. While sometimes necessary, these can be abused.
Any promise of a specific, guaranteed, or "risk-free" return on investment. Legitimate investments always carry risk, and such promises are a classic hallmark of Ponzi or pyramid schemes.