Last week, the price of a new cryptocurrency, the “Squid Game” token SQUID, skyrocketed in its first few days of trading. Following what now appears to be a scam, however, the value of SQUID collapsed by 99.99% to just $0.026 per coin, down from $2,856.64 per coin on Sunday, according to CoinMarketCap.
As of Tuesday morning, the price of SQUID stands at under one cent.
“We have received multiple reports that the website and socials are no longer functional & the users are not able to sell this token in Pancakeswap,” CoinMarketCap reported. “Please do your own due diligence and exercise extreme caution. This project, while clearly inspired by the Netflix show of the same name, is not affiliated with the official IP.”
As the New York Post reported, “The site had warned since the crypto began trading that at least some users were unable to sell it, but the developers of the project said that was by design as part of an ‘anti-dump mechanism.’”
“In another red flag tied to the crypto, the now-deleted white paper for the project included grammatical errors,” the Post added.
Prior to the collapse of the coin value, Twitter also moved to flag accounts associated with the cryptocurrency.
“SquidGameBSC” was restricted by Twitter, with the warning, “Caution: This account is temporarily restricted.”
According to the Post, “Since Twitter began flagging the accounts, the developers of the crypto also deleted a white paper that was associated with it, as well as a website on which it was selling non-fungible tokens, or NFTs, also associated with the game.”
One theory regarding the rise and collapse of the coin is that this was another example of a “rug-pull scam,” in which developers of a cryptocurrency abandon the coin, taking the funds invested while allowing the price of the coin to collapse. According to Gizmodo, the developers likely escaped with over $3 million.
CoinDesk reported that the developers behind SQUID claimed they were no longer running the project due to hackers.
“Someone is trying to hack our project these days. Not only the twitter account @GoGoSquidGame but also our smart contract. We are trying to protect it but the price is still abnormal. Squid Game Dev does not want to continue running the project as we are depressed from the scammers and is overwhelmed with stress [sic]. We have to remove all the restrictions and the transaction rules of Squid Game. Squid Game will enter a new stage of community autonomy,” the project reportedly said.
As CNET explained, below mainstream cryptocurrencies like Bitcoin, Ether, and Ripple, there is a sea of “altcoins.”
“These are to cryptocurrency what penny stocks are to blue chips, and range from legitimate projects that aim to provide decentralized finance services to simple ‘memecoins’, like Dogecoin, which are essentially bought and sold off community hype,” CNET added. “Though there are real cryptocurrencies with teams of developers behind them, there are many, many more scams.”