# Understanding Rug Pulls: An In-Depth Behavioral Analysis of Fraudulent NFT Creators

**Authors:** Trishie Sharma, Rachit Agarwal, Sandeep Kumar Shukla  
**arXiv:** [2304.07598](https://arxiv.org/abs/2304.07598)  
**Date:** 2023-04-15  
**Summary page:** https://www.summarizepaper.com/en/paper/2304.07598v1/

## Key points

- Explosive growth of non-fungible tokens (NFTs) on Web3 has created a new frontier for digital art and collectibles
- NFTs have also opened the door to fraudulent activities such as rug pulls
- Trishie Sharma, Rachit Agarwal, and Sandeep Kumar Shukla conducted an in-depth analysis of NFT rug pulls
- The study examined data from 758 rug pulls across 10 NFT marketplaces to identify the structural and behavioral properties of these schemes as well as the characteristics and motivations of rug-pullers
- Findings revealed that repeated rug pulls account for a significant proportion of the rise in NFT-related cryptocurrency crimes
- One NFT collection attempted 37 rug pulls within three months
- The study identified the largest group of creators influencing most rug pulls and demonstrated how rug-pullers from different NFT projects use the same wallets to store and move money
- Preventative strategies must be designed based on these insights to address this issue going forward
- This research is invaluable given its contribution to understanding NFT market risks as their popularity among investors seeking alternative investment opportunities in digital assets continues to grow.

## Summary

The explosive growth of non-fungible tokens (NFTs) on Web3 has created a new frontier for digital art and collectibles. However, it has also opened the door to fraudulent activities. In response to this, Trishie Sharma, Rachit Agarwal, and Sandeep Kumar Shukla conducted an in-depth analysis of NFT rug pulls - schemes aimed at stealing investors' funds. The study examined data from 758 rug pulls across 10 NFT marketplaces to identify the structural and behavioral properties of these schemes as well as the characteristics and motivations of rug-pullers. The findings revealed that repeated rug pulls account for a significant proportion of the rise in NFT-related cryptocurrency crimes. One NFT collection even attempted 37 rug pulls within three months. Additionally, the study identified the largest group of creators influencing most rug pulls and demonstrated how rug-pullers from different NFT projects use the same wallets to store and move money. To address this issue going forward, preventative strategies must be designed based on these insights. This research is invaluable given its contribution to understanding NFT market risks as their popularity among investors seeking alternative investment opportunities in digital assets continues to grow. Overall, this study sheds light on a pressing issue in the world of NFTs and provides valuable information for investors looking to navigate this emerging market safely.