A cryptocurrency based on the popular Netflix show Squid Game has collapsed in what has been called a scam after numerous warnings about the token’s legitimacy.
The token was short-lived, having launched its pre-sale on October 20. Its anonymous creators were reported as saying the presale coins “sold out in one second” via a whitepaper outlining its design.
From then on the tokens rose in price rapidly, valued at little more than one cent on Tuesday last week but soaring to more than $4 by Friday, according to a BBC report at the time.
But by then, there were already warning flags. CoinMarketCap, a website that tracks cryptocurrency prices, issued a warning that it had received reports of people being unable to sell the token once they had bought it.
Also that Friday, Gizmodo reporter Matt Novak published a cautionary article referring to the cryptocurrency as an “obvious scam,” noting there was no obvious way for people to sell the token if they wanted to.
Novak criticized the token’s white paper, which was littered with grammatical errors, and noted that the cryptocurrency’s social media accounts such as those on Telegram and Twitter did not allow regular users to make comments on their posts.
Numerous news outlets reported that they had contacted an email address posted on the Squid Game token’s website to ask for a comment, but did not receive a reply. And on October 28th CNBC cited Netflix as saying it was not associated with the cryptocurrency at all.
By Monday morning EDT, November 1, the Squid Game token had reached an all-time high of $2,861.80, according to CoinMarketCap. And then it crashed.
At the time of writing the token is down more than 99 percent, worth just $0.002. The website has disappeared, the Twitter account has not made any tweets since October 29 and has been temporarily restricted by Twitter anyway, and, according to Novak in Gizmodo on Monday morning, its creators have made off with around $2.1 million of other people’s money.
Newsweek is unable to contact the Squid Game token team for comment.
The Squid Game token’s Telegram channel, Squid Game BSC, appeared to acknowledge the crash on Monday morning. It wrote: “Someone is trying to hack our project these days.
“We are trying to protect it but the price is still abnormal. Squid Game Dev does not want to continue running the project as we are depressed from the scammers and is [sic] overwhelmed with stress.
“We have to remove all the restrictions and the transaction rules of Squid Game. Squid Game will enter a new stage of community autonomy.”
As of 11:30 a.m. ET CoinMarketCap still had a red warning label at the top of its Squid Game token price tracking page.
It read: “We have received multiple reports that the website and socials are no longer functional and the users are not able to sell this token in Pancakeswap.”
The cryptocurrency community is one that is prone to scams and hacks. One that has cropped up a number of times involves people promising to double other people’s money if they send over a certain amount of Bitcoin.
Even mainstream cryptocurrencies are hardly risk-free. Experts have previously warned Newsweek about the volatile nature of cryptocurrency prices and the risks and dangers associated with investing in them.