SQUID, a new cryptocurrency token inspired by Netflix's Squid Game show, has left investors with significant losses after developers abandoned the project, taking off with their money.
The token, which launched with an initial price of $0.01 last Tuesday, promised to offer access to an online play-to-earn game inspired by the popular Korean drama.
- Upon launch, SQUID's value rose dramatically — shooting up to $4.42 just 72 hours later.
- A large part of the token's appeal was due to mainstream news outlets covering it due to the hype surrounding the popular drama.
- Despite its rapid rise, cryptocurrency website CoinMarketCap received reports that investors were having difficulties selling their SQUID tokens on the PancakeSwap decentralised exchange.
- At its peak, SQUID's value rose to $2,861 before crashing to $0.0007 in a matter of minutes.
- Subsequently after its crash, developers of the project were unreachable, with many speculating the entire operation was an intentional scam.
Why It Matters
- The outcome of SQUID's token is a classic "rug pull" that happens in the cryptocurrency world — where developers abruptly abandon a project and take off with investors funds.
- While there are many legitimate cryptocurrency projects taking place around the world, a large number of them are 'pump and dump' schemes designed to bait people into buying "coins" (cryptocurrency tokens) that appear to be rising in value very quickly.
- One of the biggest problems about SQUID's saga is that many of the articles published by mainstream media outlets failed to make clear that the token was not officially affiliated with Netflix — giving it a sheen of legitimacy, lulling investors into a false sense of security.