In the latest “rug pull” scammers tapped into the popularity of trending shows to entice young investors to float their money on the doomed token.
“Squid Game coin” was marketed as a “play-to-earn” cryptocurrency, where people buy tokens to play in online games where they can earn more tokens.
These can then be exchanged for other cryptocurrencies or fiat money.
In the case of Squid, many buyers will be gamers looking to play in the online game of the programme, which begins in November.
“The more people join, the larger reward pool will be (sic),” according to the issue document, which says developers will take 10% of the entry fee with the remaining 90% given to the winner.
“More importantly, we do not provide deadly consequences apparently!”
Individual rounds have costs to join – for example, playing Round 1: Red Light, Green Light will cost a player 456 Squid – with six rounds in total that get more expensive as they go along.
But the biggest problem with the squid token is that you can’t cash out.
That means you can’t get the coins and store them in a wallet or even sell it.
The only way to buy the squid tokens involves a decentralized exchange service called PancakeSwap.
This isn’t a traditional exchange like Coinbase or Binance.
That’s where most people purchase bitcoin, ethereum, or the meme coins that see massive volatility.
American news site CNBC reached out through contact information listed on the Squid website to ask whether the developers were aware of the problem and working to fix it, and didn’t immediately hear back.
Netflix told CNBC it has nothing to do with the currency and doesn’t endorse it.
The coin, which started its presale Oct. 20 and apparently “sold out in 1 second,” according to its white paper, joins a list of other parody cryptocurrencies that have witnessed big run-ups for no particular reason, other than good publicity.
The meme-inspired shiba inu coin, for example, has doubled in price in the last week.
Investors were told players will, however, have to pay a preset price in squid tokens in order to participate in each game, and some rounds also require users to purchase a custom-made NFT, available for sale on their website.
Some of these NFTs feature characters from the show, including the guards who wear full-body reddish-pink suits (the exact coloring has prompted a heated debate among show fans) and black masks covering their entire face.
Gameplay doesn’t come cheap, especially at current prices.
If you want to take part in the final game of the tournament, you’ll have to pay 15,000 , or $33,450, and purchase an NFT.
Entry fees from each of the rounds are split between developers (10%) and the reward pool (90%).
The Squid Game platform also offers Marbles Pools — yet another reference to the show — wherein holders can earn tokens through staking, which is putting up their cryptocurrency holdings as collateral to earn passive income.
This comes amid a recent spate of Squid Game-related scams and malware schemes, as cyber criminals look to lure fans.
The red flag that says squid is a scam
These are things that squid developers could explain.
Maybe the mysterious authors of the coin come from a different country. After all, Squid Game is a TV show made in Korea. Perhaps they won’t allow communication over Telegram, Twitter, and other social media right now.
Coin Market Cap has a big warning on its website that Squid Game crypto buyers can’t sell the token in PancakeSwap:
We have received multiple reports that users are not able to sell this token in PancakeSwap. Please do your own due diligence and exercise caution while trading! This project, while clearly inspired by the Netflix show of the same name, is unlikely to be affiliated with the official IP.
Coin Market Cap might not call the squid project a scam outright, but it probably is.
Finally, there’s also an Elon Musk element to the story.
The project’s website includes a fake endorsement from the CEO, which is fake.
Musk is serious about bitcoin and crypto but often trolls the space, with doge being one example.
But he never endorsed the squid token online. He was only talking about Squid Game.
Wallet activity on Binance shows that the funds were transferred to “SQUID Token Rug 2.” The transaction details were hidden using a protocol called TornadoCash.
The project’s website and white paper, hosted at SquidGame.cash, have also disappeared and its Twitter account has been temporarily restricted for unusual activity.
In addition, some users noted on Twitter that the white paper, which contained several grammatical and spelling errors, outlined an “anti-dump feature” that prevented investors from selling the token.
“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,” a warning notice on CoinMarketCap’s website reads.
“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.”
However, according to CoinDesk, the developers said on their Telegram channel Monday that they no longer wanted to continue 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,” the message reportedly read. “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.”