A newly created cryptocurrency and inspired by Round 6 (Squid Game), the popular Korean series from Netflix, revealed itself as a millionaire scam this last Monday (1), hurting tens of thousands of investors. The token “Squid” plummeted from a price of $2,800 to almost zero in a few hours, shortly after its creators disappeared and the project’s official website was taken down.
The cryptocurrency inspired by Round 6 started trading at the beginning of last week and quickly became news in vehicles around the world. O Gizmodo even warned that the functioning of the Squid token was very suspicious and that it would all be an “obvious blow”, but tens of thousands of investors bought the asset, some believing it to be a product authorized by Netflix itself.
The official website for the Squid token appears to have been taken down. The social networks related to your developers have been disabled, emails sent to the project address bounce back, and your Twitter account is no longer accepting direct messages or replies. It seems, we are talking about a “rug pull” scam, in which the creators of a digital asset disappear with investors’ money.
Token Squid plummets from $2,800 to almost zero
The digital currency looked promising during its first week of operation. At its release on Monday, October 25th, the price of each Squid was just $0.01. The asset went through constant valuations and opened yesterday at US$ 38, according to data from CoinMarketCap.
However, the behavior of cryptocurrency inspired by Round 6 changed completely this last Monday. The price of Squid took off and, in less than four hours, went from $38 to reach a maximum of US $ 2,856. However, five minutes later, the asset plummeted and its value approached zero, traded for just $0.0007 on the decentralized cryptocurrency exchange Pancakeswap.
Round 6-inspired cryptocurrency made sales difficult
According to BscScan, a search engine and blockchain analysis platform, more than 40 thousand people they still owned the token at the time of the crash. Filipino John Lee was one of those harmed by the scheme. he told the New York Times who spent about $1,000 on Squid, “instinctively” believing the project had been approved by Netflix.
However, the workings of the cryptocurrency surprised Lee and many other investors. They couldn’t just sell their tokens. One of the suspicious mechanisms it only allowed the sale if the number of buyers was greater than the number of sellers by a two-to-one ratio. In addition, the sale would only be authorized upon the purchase of a second digital currency, called Marbles.
This cryptocurrency could only be obtained through a online game inspired by the Netflix series. To play the first game, for example, investors had to pay a gigantic entry fee of 456 Squid. Subsequent levels cost thousands of tokens to enter. According to the “white paper” of the currency, these mechanisms were security measures against “pump and dump” schemes.
heard by New York Times, the editor of CoinMarketCap Yousra Anwar stated that such mechanisms are intended to contain deadlocks, not prevent investors from selling their assets in the normal course of negotiations. These measures prevented many people from getting rid of their Squids as the value plummeted.
Creators disappear after cryptocurrency collapse
So far, the identity of the creators remains a mystery. They disappeared soon after the price of Squid plummeted. Their social networks have been disabled and the project’s official website is down.
According to Molly Jane Zuckerman, head of content at CoinMarketCap, this is a classic “rug pull” move. she told the New York Times that developer behavior incriminates them:
“I’m not seeing creators go online and say, ‘Wait, sorry, let’s fix this,’ which is what happens when there’s some kind of unintended problem.”
It is still difficult to estimate how much money could have been taken by the scammers. As pointed out by the BscScan, the funds were converted into other cryptocurrencies and directed to two digital wallets. One of them received approximately $3.38 million by converting Squid to Binance Coin (BNB) performed in Pancakeswap.
Finally, transactions were carried out using Tornado Cash, a “coin mixer” and software that acts as an intermediary between the parties and makes it difficult to track transfers of cryptocurrencies.
With information: The New York Times