South Korean Netflix Series Squid Game was released in September 2021, and crypto scammers were quick to take advantage of the trending show to take advantage of unsuspecting investors.
The Story Behind the Newest Crypto on the Block
The SQUID cryptocurrency appeared on the market at the end of October 2021, and was marketed as a “play-to-earn” cryptocurrency. This means that investors can buy crypto tokens and use them in online games to earn more tokens, which in theory can be traded for other cryptocurrencies or real money. This wasn’t quite the case with SQUID.
SQUID creators alleged that investors would be able to use the cryptocurrency in a game inspired by the Netflix series, a game that wasn’t yet live. With all the hype surrounding it, SQUID’s value shot up from around just 1 cent to almost $2,900 in less than a week.
However, it wasn’t long before investors realized they were unable to sell the tokens they purchased, and the platform completely shut down all trading activities — the scammers had made off with approximately $3.38 million in funds, and the cryptocurrency immediately lost 99.99% of its value.
This type of crypto scam is known as a “rug pull.” In these types of scams, the developers of cryptocurrencies promote them heavily, wait until prices are highly inflated, then suddenly pull out and take all of the money invested with them, leaving duped investors high and dry.
Red Flags That Should Have Been Spotted
The biggest red flag for the Squid-Game-inspired cryptocurrency was that you couldn’t sell tokens after buying them. This one is pretty obvious, but it’s something that most investors only realized after they’d already bought into SQUID.
Another red flag that should have tipped investors off to a potential scam before buying any SQUID tokens was the website for the project. It was full of spelling mistakes and grammatical errors, which indicated it had been thrown together quickly and without attention to detail.
Additionally, the fake company’s Telegram channel didn’t allow any outside comments, and its Twitter account didn’t allow replies to any posts. These were both signs that the SQUID developers had something to hide.
So, Have Investors Learned Their Lesson?
The problem with the crypto space is that it’s very hard to tell the difference between legitimate and scam cryptocurrencies, and there is no centralized authority regulating cryptocurrencies to weed out scammers.
So, as long as there are people willing to put their trust, and money, into the crypto market, there will always be opportunities for scammers to take advantage of investors with fake cryptocurrencies and rug pull scams, like the Squid Game token scam.
Perhaps stories like this one will make investors think twice the next time they’re considering investing in a new cryptocurrency. But, no matter what, you’re always taking a risk when you put money into any type of crypto. So, there will likely always be investors willing to take big risks in the hopes of making big returns quickly by investing in tokens that might turn out to be scams.
How To Spot Fake Cryptocurrencies
Scammers like to use pop culture to attract investors to their fake cryptocurrencies. They create so-called “meme tokens” that draw on popular memes, shows, and other cultural hits of the moment to build up hype and get investments, then disappear with the money.
For example, there was another recent rug pull scam in which the scammers created a Mando token inspired by Disney’s The Mandalorian and marketed it using images from the popular series. There is also a Marvel token, inspired by Marvel Comics, that is likely a scam.
That’s not to say that all pop-culture-inspired tokens are necessarily scams or that there aren’t other types of scam tokens, but it’s something to be aware of.
Of course, the biggest red flag that we already mentioned is if you are unable to sell a cryptocurrency you invested in. If you’re considering buying a new token, do some research first to see if you can find out what type of experiences other people who’ve already bought it are having with selling.
If crypto companies have their comments and replies turned off on social media, this can be a sign that they are trying to make it harder to find out whether or not the cryptocurrency is legit, so think twice about investing in any token company that doesn’t allow outside social media comments.
Getting Your Money Back from a Crypto Scam
If you’ve fallen victim to a cryptocurrency scam, all may not be lost. There are ways to get your money back from scammers, even if it seems they have completely disappeared with your funds.