The anonymous hucksters behind a Squid Game cryptocurrency have officially pulled the rug on the project, making off with an estimated $US2.1 (A$2.8) million. Remember on Friday morning when Gizmodo told you it was an obvious scam? It was only obvious because investors could purchase the crypto but couldn’t sell it. But plenty of people didn’t get the warning in time.
The SQUID cryptocurrency peaked at a price of $US2,861 (A$3,806) before plummeting to $$0 around 5:40 a.m. ET., according to the website CoinMarketCap. This kind of theft, commonly called a “rug pull” by crypto investors, happens when the creators of the crypto quickly cash out their coins for real money, draining the liquidity pool from the exchange.
The SQUID crypto coin was launched just last week and included plenty of red flags, including a three-week old website filled with bizarre spelling and grammatical errors. The website, hosted at SquidGame.cash, has disappeared, along with every other social media presence set up by the scammers. You can see an archived version of the website here.
Other red flags included the fact that SQUID’s Telegram channel, set up by the unknown scammers, didn’t allow comments from outsiders. And the Twitter account made it impossible for anyone to reply to posts.
But the biggest red flag was that no one who purchased the coin was able to sell. That didn’t stop mainstream news outlets like the BBC, Yahoo News, Business Insider, Fortune, and CNBC from running headlines about how the new Squid Game cryptocurrency had soared by 83,000% over just a few days.
This is just the latest example of scammers utilising pop culture to get media attention. A similar rug-pull occurred earlier this year with Mando, a cryptocurrency that used images from Disney+’s Mandalorian TV show — without permission from Disney, of course.
Does this mean that investors have finally learned their lesson and won’t invest in shady cryptocurrency projects anymore? That seems unlikely. Scam artists love the crypto space because it’s incredibly difficult to differentiate the scammers from someone who’s earnestly trying to create a legitimate cryptocurrency — perhaps because the idea of making your own currency is inherently fraudulent.
There’s a reason traditional currency has largely been the domain of governments throughout recorded history. Everyone participating in a given society needs to agree that a currency is worth something, and there are few institutions outside of government that can lend credibility to something so important. Libertarians will tell you otherwise, but we’ll have to disagree on this one.
Does this mean you can’t make money trading crypto? Obviously there are a lot of people making real dollars in the crypto space selling “mainstream” coins like bitcoin or even smaller coins like Shiba Inu, which has skyrocketed in price recently. But just because people are making money at it today doesn’t mean it’ll be around forever. Cryptocurrency will only survive if people have faith that it’s real money. And that sentiment can change from day to day.
If you’re going to buy cryptocurrency, the most important thing to look out for isn’t necessarily the price. First, figure out whether you can sell the coin after you bought it. If you can’t sell — like the people who invested in SQUID discovered they can’t — it doesn’t matter how high the price goes, just as it doesn’t matter how large of a number someone writes on Monopoly bills.
Cryptocurrency is only worth what someone else is willing to pay for it. And if the rules say you can’t even sell, you’ve just been scammed. Sorry, folks.