After acquiring millions in assets, the $Squid cryptocurrency creators have vanished, revealing that it was a scam all along.
The digital token, inspired by the South Korean Netflix series Squid Game that took the world by storm, lost almost all of its value on Tuesday (Nov 2) after hitting a peak of $2,800 (S$3,776) on Monday morning (Nov 1).
The $Squid coin was launched on Oct 28, trading at just 1 cent. It was a “play-to-earn cryptocurrency where people can purchase tokens to use in online games, which could be exchanged for other digital coins or national currencies.
The cryptocurrency peaked in less than a week before being confirmed to have been a “rug pull.”
A “rug pull” occurs when creators drain all of the project’s funds and vanish.
Featuring all the tell-tale signs of a crypto scam, the $Squid coin locked investors liquidity for a certain period, meaning buyers can’t sell the digital coin.
This aspect of the digital coin was written in the whitepaper, noted as an “anti-dump” protocol that assures healthy price growth.
Crypto investors are lured into such altcoin (cryptocurrencies other than Bitcoin) projects as they can buy before the volatile price surges, gain a profit and jump out before the crash.
It was also reported by Cnet that $Squid coin’s creators had no affiliation with the Netflix show, which is another red flag.
Investors noted that $Squid’s website was filled with grammatical errors and spelling mistakes. The website, along with its social media accounts, has vanished.
“It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters,” said Cornell University economist Eswar Prasad to BBC.
“In fact, open pump and dump schemes are rampant in the crypto world, with investors often jumping in with eyes wide open, perhaps hoping that they can ride the wave and dump their holdings for a quick profit before prices collapse,” he added.
According to cryptocurrency data website CoinMarketCap, $Squid’s value crashed by 99.99 per cent.
$Squid’s developers walked away with an estimated $3.38 million (S$4.55 million). /TISG