While cryptocurrencies present tremendous opportunities for multiplying one’s wealth, the space is also rife with scams. The latest came in the form of the Squid Game (SQUID) token, which abruptly lost 99.9999% of its value early this morning. Over $2 billion of buyers’ token value was effectively torched, leaving the founders with over $2 million […]
While cryptocurrencies present tremendous opportunities for multiplying one’s wealth, the space is also rife with scams. The latest came in the form of the Squid Game (SQUID) token, which abruptly lost 99.9999% of its value early this morning. Over $2 billion of buyers’ token value was effectively torched, leaving the founders with over $2 million in profit.
Rise and Fall of “Squid Game” Token
As displayed on CoinMarketCap, the token saw hyperbolic growth shortly after its inception last week. While only worth a cent upon launch, each token’s value rose to $4.42 within just three days. Mainstream media outlets including BBC and CNBC reported on this, giving it further exposure. Inspired by the hit Netflix horror show “Squid Game”, it made sense that the token would accrue some popularity and attention.
Its climb wasn’t over either. Prices climbed up to $12 on October 29th, and up to $38 on Halloween. This marked a 300 000% increase within just one week.
However, this pump was not driven merely by market popularity, but by a suspicious feature of the token. According to SQUID’s whitepaper, the token featured a “liquidity lock” which prevented buyers from selling it on the market for three years. This immediately drew security from Twitter, and from SQUID holders who couldn’t cash in their gains. The token’s price reflected this feature too, as it almost never declined at all throughout the week. In other words, there was only buy pressure, and no sell pressure.
This feature would prove to be the buyer’s undoing this morning, as they helplessly watched the value of their tokens collapse. The token suspiciously moonshot to nearly $3000 before completely crashing to mere hundredths of a penny at 5:40am EST. This came after the founders abruptly abandoned the project, claiming they’d been “hacked” and were now “depressed”.
Signs of a Scam
“Squid Game” token reeked of foul play from the outset. For starters, the tokens’ founders were completely anonymous. Though its website left a “team” on display, Google turned up no results for any member’s corresponding names, or social media profiles.
Furthermore, the company’s social media, website, and whitepaper were all riddled with spelling errors. However, this was the only blatant sign that the project was unofficial. The team gave no other indication that they weren’t affiliated with the real Netflix show.
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