Key Points :
- After its founders cashed out, a cryptocurrency inspired by the ‘Squid Game’ is trading near zero.
- According to CoinMarketCap, the SQUID token reached a high of just over $2,860 on Monday before plummeting to effectively zero.
- Some investors believe mainstream media outlets are to blame for SQUID’s rise.
Bernard did a quick Google search to see if a token named after the popular South Korean Netflix series “Squid Game,” which follows the lives of cash-strapped adults who compete in a deadly tournament for a large jackpot, was genuine.
He decided to invest his entire life savings of $28,000 in SQUID, a cryptocurrency that billed itself as a “play-to-earn” cryptocurrency, after catching headlines but before reading the full articles, many of which warned of some red flags surrounding the project. According to CoinMarketCap, the token reached a high of just over $2,860 on Monday before plummeting to nearly zero.
Bernard, who lives in Shanghai and asked to be identified only by his English first name because cryptocurrency trading is illegal in China, said: “My rush to buy this token is for a single idea that came into my head that ‘Squid Game’ is very, very popular now, and its token must be popular now.” “It’s a tragedy,” says the speaker. I’m not sure how I’ll be able to make up for my loss.”
Bernard tells CNBC that he is worried about how he will pay his bills because he supports his family.
The token’s anonymous creators appear to have collected at least $3.4 million in investor funds, according to BscScan transaction records. The crypto ecosystem is rife with “rug pull” schemes, in which token creators abandon their project and take investor funds by exchanging the project coin for cash.
“Squid Game Dev does not want to continue running the project because we are depressed from the scammers and are overwhelmed with stress,” the developers wrote in their Telegram channel, which now has over 89,000 subscribers.
The token’s white paper and website have since vanished, but archived versions of the token’s official landing page and white paper can still be found online. Due to “suspicious activity,” Twitter has temporarily disabled its account. CNBC sent multiple emails to the creators’ addresses listed on the website, but they did not respond.
Bernard claims he has contacted the FBI and the Securities and Exchange Commission about his lost investment.
He also contacted the token’s creators and Binance-owned CoinMarketCap, which listed the coin on its website, but neither of them “took responsibility” for his loss.
Bernard, who claims to have a lot of experience with crypto and computers, also blames the media for his SQUID investment.
He isn’t on his own. Others have taken to Twitter to say that giving meme coins like this any airtime is effectively endorsing them.
“Everyone will rush in this trading space,” Bernard explained, “and sometimes you will feel FOMO.” FOMO, or the fear of missing out, is a common feeling among crypto traders who invest in early-stage altcoins, hoping for big and fast returns on their investment.
CoinDesk Reports Squid Game :
Binance had decided to investigate SQUID, according to CoinDesk. The crypto exchange’s representatives also warned Gizmodo that new and “high-risk” projects should be avoided.
“These types of scam projects have become all too common in the DeFi space as speculative crypto investors looking for the next’moon shot’ are quick to invest in projects without conducting proper due diligence,” said a Binance spokesperson. “Speculators looking for potentially unrealistic, high-risk “lambo” or “moon shot” opportunities, whether in crypto or the securities markets, should be wary of the risks of investing in new or unverified assets.”
The fact that SQUID has crashed and is now visibly being investigated as fraud has not deterred droves of people from wanting to invest in it, in what appears to be a potential metaphor for cryptocurrency at large. People were still furiously Googling how to buy the coin as of Thursday morning, according to Newsweek, even though it’s unclear whether there’s anything left to invest in. Surprisingly, the cryptocurrency market index CoinMarketCap shows the Squid Game coin’s value has increased by 664 percent, despite the fact that users can’t sell it and it’s clearly a scam.