“Squid Coin” flash crash once rose 2300 times in a week

Another crazy virtual currency scam ended.

It only took a few minutes for SQUID to go from the hottest global gaining virtual currency to the price of the currency almost returning to zero.

After Netflix’s online drama “Squid Game” exploded, the virtual currency market gave birth to a “Squid Coin” (SQUID) named after the brand. After the currency was released, it started a skyrocketing mode. The highest increase in the past week reached 2,300 times, and the currency price reached an astonishing $2861.8 (about 18,309 yuan).

The white paper of the squid coin project shows that the project is a virtual currency game earning platform on the BSC public chain, inspired by the popular Korean drama of the same name by Netflix. The pre-sale of the currency began on October 20, and it was all sold out within 1 second.

However, on November 1, Eastern Time, the Squid coin suddenly crashed, falling from $2,861 per coin to $0.0007 within 5 minutes, a decrease of 99.999976%. According to data from the blockchain tracking and analysis platform BscScan, about 40,000 people still hold the virtual currency after the flash crash. BscScan’s transaction records show that the anonymous creator of the token has investor funds.

"Squid Coin" flash crash once rose 2300 times in a week

Image source: CoinMarketCap

The hot Squid Coins rose sharply after the issuance

According to reports, Squid Coin is an exclusive token for a gaming platform with the same name as Squid Game. The platform imitates the six rounds of the TV series, and the final winner will receive the prize money in the form of squid coins.

Different from the TV series, the platform said: “We obviously won’t provide fatal consequences!” And, the upper limit of the jackpot in the play is 38.5 million US dollars, and this simulated game will not limit the upper limit of the final prize, nor will it limit the participants. quantity.

However, players must first pay a preset price of squid coins to participate in each game. Some rounds also require users to purchase customized NFTs (non-homogenized tokens, similar to game skins or props in this game). . Some of these NFTs feature characters in the play, including guards in red suits and black masks.

According to the white paper, Squid Coins started pre-sale on October 20 and “sold out within 1 second.” Squid Coin was officially issued on October 29. The issue price was 1 cent per coin, and it skyrocketed by nearly 2400% within 24 hours after it was issued, reaching $2.22, with a market value of more than $174 million. In the following days, the price of Squid Coin climbed all the way, reaching $2861.8 before the November 1 crash.

With the price of squid coins skyrocketing, it is not cheap to participate in the above games. If you want to participate in the last game, the player must pay 15,000 squid coins and buy an NFT. The entrance fee for each round is divided equally between the developer (10%) and the reward pool (90%).

The platform also provides a pinball pool, where holders can earn tokens by staking and use their cryptocurrency as collateral to earn passive income.

The founder ran away with money, and has been flawed before?

According to media reports, the founder of Squid Coin has stated that the project is Netflix’s official token partner. And it has established a strategic partnership with CoinGecko, a virtual currency platform.

However, in an interview with the media, CoinGecko co-founder Bobby Ong refuted these claims: “Squid Coin does not meet our listing criteria, so it will not be listed and traded on CoinGecko. This is probably a scam.”

In the days before the crash, investors complained that they could not sell their Squid Coins on Pancakeswap, the only virtual currency platform that could trade the currency. Subsequently, the founder of Squid Coin explained that because the project deployed an innovative “anti-dumping technology” that restricts people from selling tokens when demand drops.

"Squid Coin" flash crash once rose 2300 times in a week

Image source: Internet

As of press time, the reporter logged into Squid Game’s official website, and the display page could not be opened. Several social media platforms for the project displayed account restriction warnings. Its developer stated in the Telegram group that it would abandon the project: “Recently, it was maliciously attacked by hackers and tried to take over official Twitter and smart contracts. We worked hard to protect it, but the price is still abnormal. Squid Game Dev will not continue to operate the project. For the project, we are frustrated and pressured by scammers, and all restrictions and transaction specifications of Squid Game will be removed, and Squid Game will enter the stage of community autonomy.”

"Squid Coin" flash crash once rose 2300 times in a week

Image source: Internet

BscScan’s transaction records show that the anonymous creator of the token has taken away at least $3.4 million in investor funds. The cryptocurrency ecosystem is full of so-called “rug pull” scams, that is, the founder of a certain token suddenly abandons their project and takes away investors’ funds. This is a typical exit scam in the DeFi field.

The developers of Squid Coin posted on their Telegram channel on Monday, saying: “Squid Game Development Company does not want to continue operating this project because we are frustrated with scammers and can’t bear the pressure.” The channel now has more than 89,000 members.

Since then, the white paper and website of the token have disappeared, but the official landing page and archived copies of the white paper are still online.

According to media reports, the project had many flaws. For example, the official website was registered less than a month ago, and the total usage time was less than three weeks; there were also many grammatical errors in the description of the project; the founder of Squid Coin did not have any on LinkedIn. Personal information, etc.

The reasons behind the crash and the identity of the developer of this coin are still unclear. At present, the website of this coin has been offline, the social media accounts associated with it have been suspended, and its Twitter account has refused to accept direct messages (DM). According to CoinMarketCap editor Yousra Anwar, developers who spoof cryptocurrency generally do not disclose their identities. Therefore, once investors are aware of the unusual movement of funds, these developers can escape the supervision and scrutiny of various countries.

In addition, according to media reports, the issuer of the project has already run away with money, and investors have lost at least $2.1 million. Analysis shows that the founder of the project used the TornadoCash protocol to hide transaction details, thereby transferring funds and cashing out the equivalent of Binance Coin (BNB). The address has now been marked as “involved in a scam.”

On social media, some netizens exclaimed: “We have witnessed another runaway story”, and some netizens said with emotion that “cryptocurrency will probably be like this in the future” and “this coin itself is a squid game.” 

According to media reports, this type of scam is often referred to as a “rug pull” by cryptocurrency investors. The so-called “carpet pulling” refers to the sudden withdrawal of support from cryptocurrency developers, abandoning a project without warning, and quickly taking away investors’ funds. The “Squid Coin” this time is a typical “carpet pulling” in the cryptocurrency field. scam.

William, the chief researcher of Huobi Research Institute, said that this is a typical fraud incident that combines the current trendy and popular elements-pop culture and virtual currency. From the perspective of narrative economics, Squid Coin has made use of the global popularity of “Squid Game” and the hype in the virtual currency market to achieve “narrative” success and gain a far-reaching influence in dissemination. Other scam projects attracted more investors to enter the market, which eventually led to the harvest. Virtual currency fraud projects like this have three common characteristics: the identity of the developer is unknown; the website pages are poorly made; the total amount of virtual currency is opaque or the team holds a large number of chips to manipulate the market.

Virtual currency speculation is risky

According to Sina Technology, an investor with the pseudonym “Bernard” said that when he heard about a token named after Netflix’s popular online drama “Squid Game”, he quickly scanned Google to see Is this coin legal?

After seeing the headlines about this token (many of which warned about some red flags about the project, but he did not finish reading it), Bernard decided to invest his life’s savings of $28,000 in squid coins.

He said: “The reason I was eager to buy this token was because I had an idea in my mind that the’Squid Game’ is very, very popular now, and its token must be very popular now. This is a tragedy. I I don’t know how to make up for my loss.”

Bernard said that he has extensive experience in cryptocurrency and computers, and he blamed the influence of the media for his mistaken investment in Squidcoin.

He is not the only one who thinks this way. Others have also stated on social media that providing any oxygen to Mimu is a kind of implicit support.

Bernard said: “In this trading space, everyone is in a hurry. Sometimes you have the feeling of’fear of running away’.” “Fear of running away” (FOMO) is a common sentiment among cryptocurrency traders. They hurriedly invested in early alternative currencies, eager to get rich quickly.

Virtual currency, as its name implies, refers to non-real currency. Since May this year, the domestic regulatory policies on virtual currencies have continued to tighten, and the crackdown on virtual currency transactions has also been increasing.

On September 24, ten ministries including the Central Bank, China Banking Regulatory Commission, Cyberspace Administration of China, Foreign Exchange Bureau, Supreme People’s Court and Supreme People’s Procuratorate issued the “Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Speculation”, which clearly stated that it is issued by non-monetary authorities. , Virtual currencies that use encryption technology, distributed accounts or similar technologies, and exist in digital form, such as so-called “stable currencies” such as Bitcoin and Ethereum , do not have the same legal status as legal tender, and cannot be used as currency. Circulate in the market.

According to analysis by industry insiders, there are many risks in the speculation of virtual currencies. Virtual currencies are susceptible to ” Musk -style” speculation. Investors are “cut leeks” in a short period of time, thus incurring huge economic and property losses.

Dong Ximiao, chief researcher of China Merchants Finance, emphasized that the public should fully understand the nature and risks of Bitcoin and other virtual currencies, withstand the temptation, protect their wallets, and refrain from participating in any form of trading or speculation.

This matter also triggered a heated discussion among Weibo netizens. The commentator jokingly said, “In line with the spirit of the squid game”, “the method of cutting leek is emerging one after another.”

"Squid Coin" flash crash once rose 2300 times in a week

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