Shocker: "Squid Game" crypto bubble pops as founders take off with the cash

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If you can’t trust an artificial currency based on a faddish television program, what can you trust? A ‘rug pull’ by the founders of Squid coin netted them $3.3 million in investor’s money, a move they explained by being “overwhelmed by stress.”


Imagine how the investors feel now:

In the Netflix hit series “Squid Game,” characters gambled with their lives. The price of playing the game in the real world may not be as steep as a life, but for many people who piled their money into Squid, a once red-hot cryptocurrency named after the show, the financial loss has still been significant.

On early Monday morning, the value of a Squid coin collapsed from a high of just over $2,860 to effectively zero as cryptocurrency traders watched the token’s unknown creators clean out some $3.3 million in funds, according to digital records.

The maneuver, known as a “rug pull” in cryptocurrency circles, occurs when a token’s creators abandon the project by exchanging many virtual coins for real-world cash. They quickly drain liquidity from the product, effectively driving the coin’s value to zero and leaving other investors holding the bag in an apparent scam.

“Squid Game Dev does not want to continue running the project,” the developers wrote on their Telegram channel Monday, saying they were “depressed” by scammers and “overwhelmed with stress.”

The Washington Post reports that the value of Squid coin had increased by “23 million percent,” going from one penny to its value at the time of the “rug pull.” That appears to have been largely driven by marketing rather than actual value. CNBC warned investors last week about the red flags appearing on Squid coin, when it was trading at … $2.22:


SQUID is trading at $2.22, up nearly 2,400% over the last 24 hours, and its market capitalization is above $174 million.

However, those interested in taking part may want to exercise caution before jumping into trading squid. CoinMarketCap has issued a warning, saying that it’s received “multiple reports” that users are not able to sell this token on Pancakeswap, a popular decentralized exchange. It is unclear why some users are unable to sell their tokens, but the white paper describing the coin does lay out an anti-dumping technology that prevents people from selling their coins if certain conditions are not met.

CNBC reached out through contact information listed on the Squid website to ask whether the developers were aware of the problem and working to fix it, and didn’t immediately hear back. Netflix told CNBC it has nothing to do with the currency and doesn’t endorse it.

The coin, which started its presale Oct. 20 and apparently “sold out in 1 second,” according to its white paper, joins a list of other parody cryptocurrencies that have witnessed big run-ups for no particular reason, other than good publicity. The meme-inspired shiba inu coin, for example, has doubled in price in the last week.

That apparently foreshadowed the “rug pull,” and might explain why the founders got all the cash. The “anti-dumping” strategy looks less like a security feature for users and more like a way to employ a more traditional pump-and-dump scheme that scammers have used in markets for centuries. By locking out trades by outside investors, it allowed the founders to suck the proceeds out themselves before the investors got wise to the scheme — as well as artificially increase demand for the commodity.


If fools and their money are soon parted, as the axiom instructs, then this is just a more modern wrinkle on an ancient mechanism for the fleecing. And more efficient, too — this one netted more than three million realbucks in less than a fortnight.

This is somewhat more significant than just another con game played on investors. We appear to be living in a bubble economy on many fronts, so much so that people are going out of their way to find bubbles to inflate. Crypto itself is risky and speculative even without the scammers, but who in their right mind would put hard cash into “Squid coin”? That question is made even more acute with the secrecy that shielded the identities of the cryptocurrency’s founders. If investors wanted that kind of high-risk investment, there are plenty of Nigerian princes on whom to call.

Hopefully authorities will catch up with the Squid coin scammers, but it’s tough to escape the thought that the investors might have gotten a lesson they deserved. And the rest of us should wonder just how much of our economy is built on bubbles such as these, not in faddish crypto but on massive money-printing and debt assumption on the basis that those won’t be subject to a call-in at some point, too. We are addicted to bubbles based on irresponsible choices and unrealistic expectations, and the bubbles those produce won’t stay inflated forever.


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