Scammers have run off with some $3.3 million after a cryptocurrency inspired by the popular Netflix series “Squid Game” collapsed yesterday morning, according to Gizmodo. The SQUID coin peaked at about $2,861 before diving to $0 around 5:40 a.m. ET on Monday – less than one week after it launched.
CoinMarketCap had previously issued an alert that users were unable to sell SQUID on the well known decentralized exchange Pancakeswap, according to CNBC. Experts refer to this kind of scam as a “rug pull,” which occurs when a cryptocurrency’s creators expeditiously cash out their coins for real money, thus emptying the liquidity pool from the exchange.
The token derived from the Korean-language show “Squid Game,” whose plot centers around a deadly tournament in which adults play kids’ games in an attempt to win a huge cash prize. Netflix is not involved with the SQUID coin, however, and company executives say they do not endorse it.
“This cryptocurrency joins a long and growing list of digital coins and tokens that piggyback on random memes or cultural phenomena,” Cornell University economist Eswar Prasad said, according to BBC News. “Remarkably, many such coins rapidly catch investors’ fancy, leading to wildly inflated valuations. Naïve retail investors who get caught up in such speculative frenzies face the risk of substantial losses.”
SQUID’s “play-to-earn” cryptocurrency allowed users to buy tokens for online games that in turn enabled them to acquire even more tokens, which could then be exchanged for other cryptocurrencies or fiat money.
In addition to the fact that those who had purchased the SQUID coin were unable to sell it, there were red flags such as a website riddled with spelling and grammatical errors (SquidGame.cash). The site and social media accounts originally set up by the scammers can no longer be found.