Investors were left counting their losses after a digital token riding on the popularity of the South Korean Netflix series Squid Game was unmasked as an apparent scam. The token, marketed under the name Squid, had been promoted as a “play-to-earn cryptocurrency” — a concept where users buy tokens to participate in online games, earn additional tokens, and eventually exchange them for other cryptocurrencies or national currencies.
A Meteoric Rise Followed by a Catastrophic Crash
What followed was a breathtaking rise and an even faster collapse. Starting at just 1 cent, the token’s price exploded to over $2,856 in less than a week — a gain of thousands of per cent. Then, without warning, its value plummeted by 99.99%, according to cryptocurrency data website CoinMarketCap, wiping out virtually everything investors had put in.
Warning Signs Were There All Along
As the BBC reported, suspicions had been growing even during the token’s meteoric climb. The most alarming signal was straightforward — people who bought Squid tokens were simply unable to resell them. This single factor, combined with a website riddled with spelling mistakes and grammatical errors, had prompted cryptocurrency experts to flag several tell-tale signs of fraud early on.
What Is a Rug Pull?
What unfolded is a textbook example of what crypto investors call a “rug pull.” This occurs when promoters behind a digital token generate excitement, draw in large numbers of buyers, bring trading activity to a sudden halt, and disappear with the money raised from token sales. In this case, Squid’s developers are believed to have made off with an estimated $3.38m (£2.48m), according to technology website Gizmodo. The project’s website is no longer online, and every social media account associated with the token has also vanished.
The Netflix Connection That Lured Investors
The token had been billed as the gateway to a new online game inspired by the Netflix series — the globally acclaimed show depicting a group of people forced to play deadly children’s games in a ruthless competition for money. The game was due to go live this month, a promise that helped fuel investor enthusiasm and mask the scam’s true nature.
Decentralised Exchanges and the Lack of Regulation
You could buy Squid on decentralized crypto exchanges like PancakeSwap and DODO. Unlike traditional platforms, these exchanges allow buyers to connect directly to sellers without the involvement of a central authority — creating an environment with minimal safeguards for ordinary investors.
“These days, new coins can be listed on decentralized exchanges on the same day they are made, with no rules or checks,” said Jinnan Ouyang of Openmining, a crypto company based in Singapore. “So you could be buying coins from anyone for any reason.”
Experts Warn of Rampant Pump and Dump Schemes
Cornell University economist Eswar Prasad painted an equally grim picture when speaking to the BBC. “It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters,” he said, adding that buyers need to be aware of the severe lack of regulatory oversight surrounding cryptocurrencies.
Professor Prasad further noted that open pump and dump schemes are rampant in the crypto world, with many investors jumping in with eyes wide open — gambling that they can ride the wave and offload their holdings for a quick profit before prices collapse. For those caught holding Squid tokens, that gamble did not pay off.