Squid Game crypto token collapses in apparent scam

A scene from the popular Netflix drama, Squid Games

A digital token inspired by the popular South Korean Netflix series Squid Game, has lost almost all of its value in what is believed to be a ‘scam’.

According to BBC News, Squid, which marketed itself as a “play-to-earn cryptocurrency”, had seen its price soar by thousands of per cent in recent days before plummeting drastically. “Play-to-earn” cryptocurrency is where people buy tokens to use in online games and can earn more tokens which can later be exchanged for other cryptocurrencies or national currencies.

This kind of scam according to the world renowned news site is commonly called a “rug pull” by crypto investors. It happens when the promoter of a digital token draws in buyers, stops trading activity and makes off with the money raised from sales.

Squid’s developers have reportedly made off with an estimated US$3.38m (£2.48m), according to technology website Gizmodo. Last Tuesday, Squid was trading at just 1 cent. In less than a week its price had jumped to over US$2,856. Its value has now plummeted by 99.99 percent, said cryptocurrency data website CoinMarketCap.

Squid was billed as a token that could be used for a new online game inspired by the Netflix series – which tells the story of a group of people forced to play deadly children’s games for money. The game was due to go live this month.

However, cryptocurrency experts had warned of several tell-tale signs that it was likely to be a scam.

Most telling was that people who bought Squid tokens were unable to sell them.

Critics also highlighted that its website contained many spelling mistakes and grammatical errors. The website is no longer online and social media accounts promoting the tokens have also vanished.

Squid was available for sale on decentralised crypto exchanges including PancakeSwap and DODO, which allows for buyers to connect directly to sellers, without a central authority according to BBC News.