Squid Game Or The $2M Scam?
Hartford, an engineer from Australia, discovered the new cryptocurrency through a tip from @jonhree112 on Twitter. Its price had risen by 1,000% and there was space for another 2000%. At the time of writing, the coin’s price was $0.72. “Buy before $1.00,” @jonhree112 commented.
Hartford is a seasoned crypto trader, active since 2017. He had observed the amazing ascent of Shiba Inu, a funny meme currency, which had risen 900% in less than a month, into the world’s top ten cryptocurrencies.
Before investing, Hartford checked BscScan, which tracks all Binance transactions. Some individuals said the Squid Game currency may be a scam: it sprang out of nowhere, was likely to infringe on trademarks, and hence could be worthless. But Hartford sneered. He sat back and watched, having spent $300 on Squid Game coins. It reached $1 first, giving him a 10% return. Then $2, $3. The following morning, Hartford found the Squid Game currency at $5. His $300 had grown to about $1,660. He squealed.
But odd things happened. On the early morning of October 29, he observed individuals tweeting that they couldn’t sell their $SQUID holdings. Others corrected those having trouble cashing out, stating they needed to acquire marbles from the project’s proprietors to sell. Hartford halted.
On October 31, Hartford bought $50 worth of marbles to see if he could get his money back. Hartford’s $300 stake grew to $200,000 when the Squid Game coin reached $600. It’d finally hit $2,861, putting Hartford at $1 million. On paper. It was all a sham. And Hartford is one of many victims.
On November 1, only after 1:38 pm UTC, the developers of the Squid Game currency removed $3.36 million from the project. The exchange’s liquidity pool vanished in seconds, and the currency was trading for a fraction of a penny.
According to Patrick McCorry, CEO of PISA Research and former assistant professor of cryptocurrency and network security at King’s College London, “anyone may create a token & liquidity pool.”
As he read more tweets about it, Hartford began to realise that it couldn’t be true. Another clue was the chart’s incessant upward movement. But he isn’t furious about the coin’s ascent or the $300 that he has lost. The fact of the matter is that crypto is a market economy without regulation.
The founders of the project did not react to a help email submitted with the white paper. However, the Squid Game currency scam isn’t the first time that buyers have been duped. In September 2020, the developer of SushiSwap, a highly regarded coin, vanished and with him took $13 million in what investors thought was a “rug pull.” After public protest, the developer returned the coins but then vanished.
According to McCorry, such pulls occur when significant holders of a coin may readily sell it and the market is neither deep or liquid.
According to BscScan, eight wallets hold over 1% of all Squid Games coins in circulation. According to Ethereum analytics firm Etherscan, one such account had 5% of all tokens. It sent $3.36 million to some other wallet. “Rug pulling ability relies on market liquidity,” adds McCorry. For example, how many coins would it take to empty the market by grabbing all the valued coins?
The Squid Game fraud won’t be the last, adds McCorry, if individuals buy-in without due investigation. Regulation is needed to address the issue. “It has to be comprehensive, global, and proportionate,” adds Wooller.