Exit scam

Type of confidence trick

An exit scam is a confidence trick, con job or fraud, perpetuated under the guise of a legitimate business, that ends when the originator absconds with the funds contributed by participants. When a business entity rug-pulls and stops shipping orders while receiving payment for new orders, it could take some time before it is widely recognized that orders are not shipping. The entity can then make off with the money paid for unshipped orders. Customers who trusted the business do not realize that orders are not being fulfilled until the business has already disappeared. Exit scams are commonly associated with the rise of cryptocurrency projects due to the lack of regulation and decentralized ecosystem.

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