The popular cryptocurrency known as “SquidGame Cash” or “SQUID” has collapsed amid an apparent “rug pull” scam.
The digital token, which appeared in the wake of the success of Netflix’s South Korean survival drama series “Squid Game,” marketed itself as a “play-to-earn cryptocurrency” on the Binance Smart Chain (BSC).
The token is not officially affiliated with Netflix.
While the cryptocurrency proved to be an instant hit when it launched last week with a price of just $0.01 and saw its market capitalization quickly rise above $174 million, a number of reports were critical in noting that users were unable to resell their tokens, meaning they held little value.
Over the past 24 hours, the SQUID cryptocurrency peaked at a price of $2,861 before plummeting to $0 around 5:40 a.m. ET., according to CoinMarketCap, a price-tracking website for crypto assets.
It is widely believed that the creators of the digital token pulled a “rug pull“—a scam whereby the developers of the currency cash out their coins for fiat money, withdrawing everything from the liquidity pool, and in turn driving the coin’s price to zero before abandoning the project.
A similar scam occurred back in April this tear with the cryptocurrency known as “Mando,” which illegally used images from Disney+’s “Mandalorian” TV show to promote itself.
The currency’s website hosted at SquidGame.cash, has disappeared, along with all its social media presence.
The official Twitter account for the Squid Game token, which had amassed more than 57,000 followers, is now temporarily restricted because of “unusual activity.”
SQUID’s developers have made off with an estimated $3.38 million, according to technology website Gizmodo.
Users are now unable to use or trade the currency, and a notification on CoinMarketCap reads: “We have received multiple reports that the website and socials are no longer functional & users are not able to sell this token in Pancakeswap. There is growing evidence that this project has rugged. Please do your own due diligence and exercise extreme caution. This project, while clearly inspired by the Netflix show of the same name, is NOT affiliated with the official IP.”
According to screenshots from a Telegram group, which has been accessed by CoinMarketCap and that appears to be run by the creators of the digital token, the creators claim they are not responsible for the current collapse.
“Someone is trying to hack our project these days. Not only the Twitter account but also our smart contract,” the screenshots read.
“Squid Game Dev does not want to continue running the project as we are depressed from the scammers and is overwhelmed with stress,” the message continues in broken English before concluding with an apology for “any inconvenience” to the currency’s users.
The Epoch Times has been unable to verify the screenshots.
“Remarkably, many such coins rapidly catch investors’ fancy, leading to wildly inflated valuations,” Cornell University economist Eswar Prasad told the BBC. “Naive retail investors who get caught up in such speculative frenzies face the risk of substantial losses.”
Earlier this year, Ukraine became the latest country to legalize cryptocurrency and other digital assets.
In an almost unanimous vote on Sept. 8, the Ukrainian Parliament adopted a virtual asset bill, known as Bill No. 3637, which provides clarification on how individuals and businesses utilizing digital currency can be properly protected and also determines how Ukraine will regulate the cryptocurrency market going forward.
Just days before the adoption of the bill in the Ukrainian Parliament, El Salvador adopted Bitcoin as legal tender alongside the U.S. dollar, with the hopes that it will boost financial inclusion in El Salvador, where around 70 percent of citizens lack access to traditional financial services.
Meanwhile, China’s central bank in September declared all cryptocurrency-related transactions illegal while vowing to crack down on the virtual currency market.
The People’s Bank of China said in a statement, translated by CNBC, that services offering trading, order matching, token issuance, and derivatives for virtual currencies are prohibited. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said.