$3 360 000 USD
SQUID GAME TOKEN
DESCRIPTION OF EVENTS
"In the last week of October, there was a curious new cryptocurrency that burst onto the scene: Squid Game, or SQUID for short." "The Squid Game project is a crypto play to earn platform inspired by the Korean hit series on Netflix about a deadly tournament of children's games. There is no longer dystopian world where a mysterious organisation gathers people who are in large amounts of debt and “living on the edge”. Rather than 456 players drawn from different walks of life but each deeply in debt chosen intentionally by the organizers in the drama, everyone here in crypto world can participate in the Squid Game with SQUID token or related NFTs in our marketplace."
"A new play-to-earn digital token, Squid Game, which is seeking to cash in on the popularity of Netflix’s mega-hit Korean survival drama, has risen 62,833% since Tuesday to $7.54 Friday morning, with a 253.89% gain over the past 24 hours, according to CoinMarketCap." "Compared to $38.5 million bonus for the last winner, we crypto Squid Game will not limit the maximum of the final bonus as well as the numbers of participates. The more people join, the larger reward pool will be. More importantly, we do not provide deadly consequences apparently! Your experience will only reflect on the joy of winning rewards and sorrow of losing money when the game failed."
"SQUID is the crypto token’s currency code, with a logo featuring the shapes on a mysterious card given to potential players in the hit series." "Squid Game token went on presale last week and was sold out in “a second,” according to the white paper." "The token is used to pay for an online game that will launch in November, according a white paper."
"Unlike in the dark comedy, the online game is not limited to 456 players in debt, “everyone here in crypto world can participate,” according to the white paper. There is no maximum limit to the amount of the final prize, which gets bigger the more players participate. There are six levels in the online game, and the higher up players go, the more expensive the entry fee will be. Developers will take 10% of the entry fee and 90% will go toward the final bonus for the winner of the online game."
"Squid Game values users trust and love and it was built ground-up with security in mind." "We are approaching an audit authority so far, audit report will be published on our social medias and website BEFORE THE PRESALE. More external auditors are welcomed to review our smart contract and please send us feedback to our official email."
"Crypto investors are regularly encouraged to scrutinize a project’s website to see whether information about the founders is prominently displayed."
"Squid Game’s website did this — naming David Kanny as CEO. He was described as a University of California Irvine alum who had five years’ experience at Netflix, but no LinkedIn profile exists."
"Searches for other named executives — Mabel Jah, Kevin Sam, Christian Abbigail, Daniel Jolia and Lawrence Dan — also drew blanks on Google." However, there were "several red flags including grammatical and spelling errors in the project’s white paper and the fact that the project’s website was registered less than a month ago."
"The token’s value rose dramatically, and just 72 hours later, it was worth $4.42 — an increase of 44,100%. By then, it had already attracted coverage from some of the world’s biggest media outlets, including the BBC and CNBC." "Media coverage failed to point out that there was no official tie-in with the Netflix series, thus providing an unwarranted veneer of respectability." "Squid Game grew to $1, then $10, then $100, all while capturing more people giving into their feelings of FOMO (fear of missing out). It peaked at a valuation of nearly $3,000, tremendous growth in the space of a week." "Unfortunately, many of the articles published about SQUID failed to make it clear this token is not officially affiliated with Netflix — giving it a sheen of respectability that may have lulled investors into a false sense of security."
Purandar Das, president and co-founder at Sotero, called this an “electronic pump-and-dump scheme” in an email to Threatpost. “It appears they may have come up with a very nifty scheme,” Das wrote. “Adopting the brand of a very popular and current theme would have permitted them to cover themselves with a cloak of credibility. Combine that with the fear of missing out, they appear to have concocted a scheme to combine the Squid Game name with cryptocurrency.” "One victim told CoinMarketCap that they were drawn in by the project’s website because “it seemed pretty decent and legitimate.”"
"CoinMarketCap has issued a warning that it has received “multiple reports” of users unable to sell the digital token in decentralized cryptocurrency exchange Pancakeswap." "This was initially attributed to the anti-dump mechanism described by the creators." "SQUID implements an innovative anti-dump mechanism. Buying in the market will release selling credits with a rate of 2:1. In addition, the maximum amount to sell $SQUID is 1/2 of total buying value in the pool so if there is no selling credit left in the pool you can not sell more even after two continues buying in small amount."
"Generally, tokens that impose large penalties on sellers as a mechanism to discourage any selling is a red flag that investors should watch out for, as these types of mechanics interfere with price discovery and lead to artificial valuations."
“The biggest flag was that it never had a dip,” explained Dubey. “Every coin has to have a dip. There is no way a coin goes up constantly for five days...The only thing that looked like a dip was when it stayed at the same level.”
The level of price appreciation was another big concern. “When it hit $1, I was like, ‘Okay, 20x is reasonable. That can happen.’ When it got to $10, that’s when I started thinking there’s something off,” he said.
“Most coins that actually have a product behind them are barely able to reach that point,” continued Dubey.
"Prices stood at $38 as of 6am London time on Monday morning — accelerating to $90 by 7am, $181 by 8am, and $523 by 9am. Just 35 minutes later — at 9.35am — SQUID appeared to hit highs of $2,861.80. A surge of 7,500% in three-and-a-half hours is unheard of… even in the notoriously volatile world of cryptocurrencies."
"Within 10 minutes, it all went awry. The creators took the $3.36 million invested into the coin until Nov. 1 and vanished. The coin was reduced to a valuation of less than a third of a cent in value; the holders were left gaping at the speed and scale of the “rug pull.”" "Players in the Squid Game cryptocurrency market have been eliminated — at least their investment has — by what cryptocurrency watchers have called a classic “rug-pull” scam." "According to reports, the BSC project SQUID, which has the same name as the popular Korean drama "Squid Game", is suspected of running off or being attacked, with an estimated loss of 12 million USDT."
“All the rules of how a token can be bought and sold are contained in the smart contract code itself, since these tokens are traded on a decentralized ‘automatic market-maker’ contract,” Stewart said. “Basically, it just needs an extra line of code in the transfer function to prohibit the swap from occurring in the ‘sell’ direction unless the transaction sender is the address controlling the contract (i.e. the developer who removed all the liquidity from the pool and absconded).”
"SQUID owners have told CoinMarketCap how they had little choice but to watch helplessly as the token’s value rose. An anti-dumping mechanism that was imposed by the project’s developers meant they could not sell."
“Someone is trying to hack our project these days,” CoinMarketCap reported the administrators said about the incident. “Now only the Twitter account but also our smart contract.”
“Someone is trying to hack our project these days. Not only the twitter account @GoGoSquidGame but also our smart contract. 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 overwhelmed with stress [sic]. We have to remove all the restrictions and the transaction rules of Squid Game. Squid Game will enter a new stage of community autonomy,” it wrote. "The post declared that the project “will enter a new stage of community autonomy” — but it’s unclear what this would entail. And it concluded by offering an apology for “any inconvenience” — hollow words for those who have ended up losing money by purchasing SQUID tokens."
"According to the data, the official website of the project party cannot be opened at present; all the tokens in the current Pancake pledge pool have been transferred to the address through two transactions. In addition, traders from the address sold SQUID tokens to transfer the BNB in the trading pair in Pancake. The source of the initial gas required for the above transactions comes from the currency mixing application Tornado.Cash."
"The Twitter account associated with the SQUID cryptocurrency has been “temporarily restricted for… unusual activity,” and the squidgame.cash site is gone, according to the report." "The token’s white paper and website have since disappeared, though archived copies of its official landing page and white paper are still online. Twitter has temporarily restricted its account due to “suspicious activity.” The creators did not respond to multiple emails that CNBC sent to the addresses listed on the web site."
"Binance, one of the largest crypto exchanges, said on Thursday it has created a team of investigators to try and track down the Squid Game token scammers." "The Binance team will be exploring options to support the community such as blacklisting affiliated addresses and "deploying blockchain analytics to identify the bad actors", a spokesperson told Insider. Binance will also provide its findings to law enforcements in the relevant jurisdictions."
"Apparently, the scammers have used their scam proceeds to buy SHIB tokens, a SHIBArmy‘s Twitter post says. According to the post, a purchase of 3 million SHIB tokens worth $125 million was traced back to a Squid Game wallet. The funds were first sent through several wallets, probably in an attempt to conceal its source. There were also several transactions that added up to the total sum of $125 million."
The Squid Game token launched with an innovative concept which would take players through all 6 levels of challenge against one another, mapped after the hit Netflix series, with NFTs provided at each stage. Unfortunately, the team was fake, and the smart contract was designed to prevent any selling, except by the creator. Widespread coverage by media propelled the token to extreme valuation, and gave the project an air of credibility.
On November 1st, the project creator decided to sell their tokens, draining all the value from the liquidity pool. All investors lost their funds, and no attempt has been made to repay them. It does not appear that the scheme's creator has been identified.
HOW COULD THIS HAVE BEEN PREVENTED?
Complex and expensive regulations mean that many new projects start without any sort of background check or even known team, while uncertainty and fear lead to legitimate projects starting anonymously. Participants come to expect this.
Having a lightweight and reasonable framework would allow projects to start legimitately, without fear, and attract participation while protecting participants. If we can create a safe space which projects want to be a part of, with community-based protections for standard crypto-assets, we could ultimately end the cycle.
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