a phone with Squid Game on its screen and Squid Game guards standing behind it

Squid Game token crashes to zero as developers make off with $3.4M

It’s game over for Squid Game. The token named after a wildly popular Netflix series has crashed to zero, shortly after skyrocketing by over 300,000% days after launch. Over 40,000 investors have been left holding a worthless token as developers vanished with over $3.3 million and shut down their website.

Squid Game token, trading under the ticker symbol SQUID, popped up about a week ago. It was one of many worthless tokens that launched to leverage the fame attained by Squid Game, a Netflix series set in South Korea. SQUID took off as investors bought into the promise of a play-to-earn online game that would emulate the TV show.

SQUID first started trading at just over a penny per token early last week. However, the rise quickly started when popular media outlets started clamoring to cover it. BBC, CNBC, Fortune, Business Insider, Yahoo News and more were all covering the newest shiny digital currency. None of them pointed out the obvious red flags. Fortune has since then taken down its article on SQUID (find the archived article here).

Boosted by the attention from the media outlets, SQUID took off, recording parabolic gains that dwarfed all the other digital currencies in the market. Last week, the token was trading at $0.01235, but by Friday afternoon, it was trading at $11.

The gains would continue into the weekend, and on Monday, it shot up all the way to $2,856, according to data by CoinMarketCap.

And then it happened.

SQUID crashed from its record highs to $0.0032 where it’s trading at press time. According to some reports, over 40,000 investors have lost their money in the rug pull.

A tale of FOMO and ignoring obvious red flags

Squid Game turned to a popular digital currency scammers’ trick—capitalizing on pop culture to lure investors. And as it turned out, the developers didn’t need to do much to attract attention, and money.

The website, which they have since then taken down, was simple and directed the visitors to acquire SQUID tokens on PancakeSwap and DODO, two decentralized finance protocols built on the Binance Smart Chain. BSC has turned out to be a scammers’ haven, with a $60 million rug pull having taken place just two days ago.

The project was supposedly centered around a play-to-earn online game, based on the Squid Game show. The developers were taking advantage of the rise in blockchain games.

SQUID’s website didn’t reveal much, but contained a link to its white paper. A look at the white paper shows it was mostly copy-pasted from other projects. However, the biggest red flag was the myriad of typos on the white paper, starting on the second line.

The red flags went on. The developers were all pseudonymous and with no track record in the industry. On their Telegram channel, they didn’t allow any other person to contribute, be it to ask questions or make a complaint. Their Twitter account also didn’t allow for any replies—the social media platform has since suspended the account over suspicious activity.

Another big red flag, however, was that the SQUID developers had put some measures in place ensuring the holders couldn’t sell their tokens. They claimed that this was an anti-dump mechanism. They also required holders to acquire a second token, known as Marbles, in order to sell their SQUID tokens. Marbles could only be earned by participating in the online Squid Game, which hadn’t even launched.

The developers dropped the bombshell on Monday, telling users that they would no longer work on the project.

“Someone is trying to hack our project,” they claimed on Telegram. They didn’t want to continue working on the project as “we are depressed from the scammers and overwhelmed with stress.”

Investors ignored all these red flags and poured money into the project. According to BscScan, the developers exchanged the token for Binance Coin, making off with $3.35 million. They then used coin mixer Tornado Cash to obfuscate their moves and have since then vanished.

Watch: CoinGeek New York presentation, Micropayments for the World: APIs, Tokens and Computation

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.