Popular South Korean Netflix series Squid Game inspired digital coin has lost almost all of its value as it was exposed to be a scam.
The digital coin called Squid was marketed as a “play-to-earn cryptocurrency” and saw an increase of thousands of percent in its price during the last few days.
According to reports, however, the coin attracted criticism for not allowing its holders to resell their tokens.
Amongst the crypto investors, such scams are commonly called a “rug pull”.
The rug pull occurs when promoters of digital currencies attract buyers and then halt the trading activity while making money from the initial sales.
According to reports, developers of Squid raised an estimated $3.38m.
“Play-to-earn” cryptocurrency refers to when people purchase tokens to use in online games and can earn more tokens which can later be exchanged for other cryptocurrencies or national currencies.
Squid was trading at only 1 cent last Tuesday. Its value jumped beyond $2,856 in a matter of days.
As per reports, Squid’s value has now plunged by 99.99%.
Squid was billed as a token that slows its holders to use it for a new online game inspired by the squid Game series.
The Netflix series follows the story of a group of people participating in deadly children’s games for money. The game was scheduled to go live this month.
Cryptocurrency experts had cautioned investors owing to several tell-tale signs that Squid was like a scam. The most concerning sign was that purchasers of Squid tokens were not able to sell them.
Critics also pointed out numerous spelling mistakes and grammatical errors on the website which is no longer online. Social media accounts that were promoting the tokens have also disappeared.
Economist at Cornell University, Eswar Prasad said, “It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters”.
Prasad added, “In fact, open pump and dump schemes are rampant in the crypto world, with investors often jumping in with eyes wide open, perhaps hoping that they can ride the wave and dump their holdings for a quick profit before prices collapse”.
Decentralized crypto exchanges like PancakeSwap and DODO had Squid available for sale.
Jinnan Ouyang from Singapore-based crypto company Openmining said, “Nowadays new coins can be listed on decentralized exchanges on the first day they are created, without any regulation or due diligence”. She added, “So you could be buying coins from anyone with any agenda.”
