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It only took a few minutes for SQUID to go from being the hottest virtual currency in the world with the highest growth rate to almost zero.
After the Netflix online drama "Squid Game" became popular, a virtual currency named "Squid Coin" was born in the market. The currency started to surge, with the highest increase of 2,300 times in the past week, and the currency price reached an astonishing US$2,861.8 (about RMB 18,309).
However, on November 1, Eastern Time, the currency suddenly crashed, and the price of the currency fell directly to almost zero. As of press time, the price of Squid Coin has fallen to about RMB 0.02, and the market value is only RMB 5.87. Image source: CoinMarketCapImage source: CoinMarketCap
The price of the currency crashed at 9:35 a.m. EST on November 1. After a short-term surge above $2,850, Squidcoin suddenly plummeted to almost zero in just a few minutes. An investor said: "It started to fall as soon as I bought it. I didn't have time to react. It fell directly to a few cents."
The white paper of the Squidcoin 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 on Netflix. The currency started pre-sale on October 20 and was sold out in 1 second.
According to media reports, the founder of Squidcoin once said that the project is Netflix's official token partner and has established a strategic partnership with the virtual currency platform Coingecko.
However, in an interview with the media, Coingecko co-founder Bobby Ong refuted these claims: "Squidcoin does not meet our listing criteria, so it will not be listed for trading on Coingecko. It is most likely a scam."
In the days before the crash, investors complained that they could not sell their SquidCoin holdings on Pancakeswap, the only virtual currency platform that can trade the currency. Later, the founder of SquidCoin explained that the project deployed an innovative "anti-dumping technology" that restricted people from selling tokens when demand fell.
Image source: Internet Image source: Internet
As of press time, the reporter logged into the official website of Squid Game, and the page could no longer be opened. Multiple social media platforms of the project displayed warnings of account restrictions. Its developers said in the Telegram group that they would abandon the project: "It has recently been maliciously attacked by hackers who tried to take over the official Twitter and smart contracts. We tried hard to protect it, but the price is still abnormal. Squid Game Dev will not continue to operate the project. We are frustrated and under pressure from the scammers. We will cancel all restrictions and transaction regulations of Squid Game, and Squid Game will enter the stage of community autonomy."
Image source: Internet Image source: Internet
Founder absconded with funds According to media reports, the issuer of the project has absconded with funds, 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 an equivalent amount 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 story of running away", while others lamented that "most cryptocurrencies will be like this in the future" and "this coin itself is a squid game."
According to media reports, the project had many flaws early on, such as 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 had no personal profile on LinkedIn, etc.
Previously, the virtual currency data platform CoinMarketCap has issued a warning that the project is obviously inspired by Netflix's web drama of the same name, but it is not an official IP. In addition, the project is progressing slowly, so investors are advised to conduct due diligence and invest with caution.
The platform also said that it has received multiple reports that users are unable to sell the token on the exchange Pancakeswap. The Squidcoin white paper does propose an anti-dumping technology, and people cannot sell if certain conditions are not met, so buying the virtual currency is extremely risky, and many people believe that Squidcoin is a botched scam.
William, chief researcher of Huobi Research Institute, said that this was a typical scam that combined the current trendy elements - pop culture and virtual currency. From the perspective of narrative economics, Squid Coin took advantage of the global popularity of the film and television series "Squid Game" and the hype in the virtual currency market, achieved "narrative" success, and gained a profound influence in communication. Compared with other scam projects, it attracted more investors to enter the market, and finally led to being harvested. Such virtual currency scam projects have three common characteristics: the identity of the developer is unknown; the website page is crudely made; the total amount of virtual currency is not transparent or the team holds a large number of chips to manipulate the market.
Virtual currency speculation is risky. Virtual currency, as the name suggests, refers to non-real currency. Since May this year, domestic regulatory policies on virtual currencies have continued to tighten, and the crackdown on virtual currency transactions has also been increasing.
On September 24, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the Cyberspace Administration of China, the State Administration of Foreign Exchange, the Supreme People's Court, the Supreme People's Procuratorate and other ten ministries and commissions issued the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation", which clearly stated that virtual currencies that are issued by non-monetary authorities, use encryption technology, distributed accounts or similar technologies, and exist in digital form, such as Bitcoin, Ethereum and other so-called "stable coins", do not have the same legal status as legal tender and cannot circulate as currency in the market.
Industry insiders analyzed that there are many risks in speculating in virtual currencies. Virtual currencies are prone to "Musk-style" speculation, and investors will be "cheated" in a short period of time, suffering huge economic and property losses.
Dong Ximiao, chief researcher of China UnionPay Financial, stressed that the public should fully understand the nature and risks of virtual currencies such as Bitcoin, resist temptation, protect their wallets, and not participate in any form of transactions or speculation.
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