The cryptocurrency token $SQUID, inspired by the South Korean Netflix megahit Squid Game, crashed on Monday in an apparent scam, news outlets have reported.
On October 26, a crypto coin called $SQUID was launched by a group with no affiliation to the creators of the show and it exploded in growth.
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After listing at 12 cents, on early Monday morning, it briefly hit a peak of $2,800 before later plummeting to $0, according to the website CoinMarketCap.
Crypto experts saw it coming, tech news site Gizmodo reported, but that didn’t stop investors from pouring money into the cryptocurrency.
They said the anonymous scammers behind the cryptocurrency have made off with millions.
The novelty meme was launched as the exclusive coin of the Squid Game project—a crypto play-to-earn platform where people buy tokens to use in online games.
Investors were promised they could earn more tokens which could later be exchanged for other cryptocurrencies or national currencies.
Investors rushed to bet on the token to play games based on the Netflix show in the project that was due to start in November. The token then soared in value.
On Monday, less than a week since its launch, $SQUID crashed 100 percent.
Within a span of 10 minutes, the token went from being valued at $628.33 to $2,856.65 before falling to $0, according to crypto data tracker CoinMarketCap.
Gizmodo puts the scam at an estimated $3.38 million. Other news outlets such as Cnet say the creators made away with $2.5 million of investor money.
This kind of scam is described as a ”rug pull” in crypto circles.
This happens when a token’s promoter draws in buyers, only to stop the trading activity and drain the money raised from sales.
Creators cash out the coins in exchange for real money, quickly devaluing the crypto’s value and making a quick – and in this case – vast profit.
The scam is aided by the anonymity that crypto wallets afford.
Critics say it was an obvious scam pointing to plenty of red flags, including a dated website – now defunct – filled with spelling and grammatical errors. Social media accounts – including Twitter – promoting the token have also since vanished.
Experts say that the popularity of Squid Game made $SQUID an easy sell, amid an ongoing hype around cryptocurrencies.
“People have seen what happened with other meme coins like Dogecoin and Shiba Inu, and are anxious not to miss the next one,” said Joe Khalique-Brown, lead cryptocurrency editor at CoinJournal.
CoinMarketCap had flagged the Squid Game token for not being able to resell.
“Please do your own due diligence and exercise caution while trading!” read the warning.
Netflix also made it clear that it was not affiliated with the token.