The Squid Game cryptocurrency (SQUID) appeared on Oct. 20 as presale and soon appeared on price-tracking website CoinMarketCap. Its official website promised a play-to-earn replica of the tournament in the Netflix show, and that seemed to have given investors the green light to jump in despite numerous red flags. And just in five minutes, the price of SQUID crashed from $2,861 to zero in what appears to be a rug pull, where a crypto developer abandons the project after gathering funds. The result of what some might say was an unsurprising plot twist, was that the only ones surviving this round of Squid Game were its developers.
The Squid Game cryptocurrency’s now closed website announced that the SQUID token would be used as an entry fee for the unlicensed play-to-earn Squid Game, where it promised the winner 90% of the accumulated entry fees of eliminated players. With the play-to-earn game once set to be launched in November, SQUID’s price grew tremendously, surging more than 230,000% in the past week from US$0.01 at its release to $2,861 right before its collapse on Monday night Asia time. It is reported that the developers stole an estimated $3.38 million from investors. Along with the official website, its white paper is also gone. Twitter restricted access to the Squid Game crypto account due to “unusual activity.”
But many on Twitter are saying they’re not surprised, and that there were several red flags before the collapse. CoinMarketCap warned crypto investors that it has received multiple reports that users could not sell their SQUID tokens on Pancakeswap, the token’s only market.
The developer’s communication methods online were also somewhat sketchy, as it hid replies on Twitter that called the project a scam, and then changed its settings to allowing only designated users to write replies to their announcements. The project’s Telegram group also showed only the official announcements and did not allow other members to send messages. Moreover, the identities of the founders and developers listed on the project website could not be verified on sites such as LinkedIn. Lastly, many spotted spelling and grammatical mistakes on the website and the white paper, which fueled the suspicion.
One Twitter user wrote that he is the winner of the Squid Game as he has spotted these signals early on and didn’t invest in the cryptocurrency.
Meanwhile, the developer team has sent a seemingly dubious message on its Telegram Group at 5:46 p.m. on Monday, hours before the price crash, saying “Someone is trying to hack our project these days,” adding that “Squid Game [development team] does not want to continue running the project as we are depressed from the scammers and [are] overwhelmed with stress.”
The episode calls for investors to select cryptocurrencies with discretion and analysis, especially memecoins that ride on the popularity of cultural phenomena.
“It is characteristic of the current hype in which crypto is located that people no longer think and seize their opportunities with a lot of risks. Scammers take advantage of that,” said Ruud Feltkamp, CEO of Cryptohopper.
“At the end of this cycle, which is expected in early January, most of the tokens will plummet in value, and only a small amount of projects will remain. These will then have to prove their worth. So keep paying attention to what you invest in and DYOR (Do Your Own Research).”