Millions of dollars vanished within minutes after investors piled on a new cryptocurrency inspired by "Squid Game," the popular Netflix survival series, only to see its value drop to near zero within a few hours.
The cryptocurrency, called Squid, began trading early last week at a price of just one penny per token. In the following days, drew attention from a number of the main mass media. As of early Monday, it was trading at $ 38 per token on a cryptocurrency exchange called Pancakeswap.
Then Squid got on a roller coaster. In a 10-minute span later on Monday, the token's value rose from $ 628.33 to $ 2,856.65, according to CurrencyMarketCap, a cryptographic data tracking website. Then five minutes later, it was trading at $ 0.0007.
More than 40,000 people still had the file after the accident, according to BscScan, a blockchain search engine and analytics platform. One of them was John Lee, 30, from Manila. He said he had spent $ 1,000 on Squid's tokens, thinking "somewhat instinctively" that the token had been authorized by the Netflix show.
Lee said he was surprised when he found out he couldn't sell the token right away. Now he can sell the tokens, but he would be left with "next to nothing," he said.
Sharon Chan, a Netflix spokeswoman, declined to comment.
The reasons behind Squid's collapse, reported before Gizmodo, they were not clear. Neither were the identities of its creators. Your website appears to have been disconnected. An email sent to your developers was recovered. Their social media channels appeared to have been shut down. His Twitter account was not accepting direct messages or replies.
Pancakeswap, the trading platform, did not respond to a request for comment.
As a consequence, the crypto world is pondering whether Squid was what Molly Jane Zuckerman, head of content at CoinMarketCap, called a "carpet tug," in which supporters of a cryptocurrency effectively leave the market and take the money. funds from its investors.
"I don't see developers going online and saying, 'Wait with us, sorry, we'll solve this,' which is what happens when there is some kind of non-malicious problem," he said.
Squid's downfall highlights regulatory gaps over cryptocurrencies, such as governmental agencies and private businesses Hurry to control the volatile but increasingly popular investment.
Meme coin developers like Squid rarely identify themselves, said Yousra Anwar, editor of CoinMarketCap. If investors suspect financial wrongdoing, they could switch from one country to another, or from one regulator to another, to investigate.
Squid came with some unusual features that might have alarmed investors, Anwar said. The developers demanded that buyers outnumber sellers two to one to allow a sale.
The developers called the sales cap an "anti-dumping" mechanism, according to a whitepaper, the document in which the developers describe the features and technical foundations of their once-online cryptocurrency. Ms Anwar said that such mechanisms were intended to stop declines, not to prevent holders from selling in the normal course of trading.
The developers also required users to obtain tokens from a second cryptocurrency, called Marbles, to sell their Squid tokens, according to the white paper. Marbles can only be earned by participating in an online game inspired by the show. To participate in the first game, for example, players had to pay a hefty entry fee of 456 Squid tokens. Subsequent tiers cost thousands of tokens to enter.
Those characteristics prevented many forks from selling as the value plummeted, Zuckerman said.
The amount of money invested and lost in the tokens is difficult to quantify, he said. But BscScan labeled two crypto addresses as associated with what he called a "rug pull" from Squid. One of them exchanged $ 3.38 million Squid's value in a popular crypto called BNB, the BscScan page showed. To complete the transactions, both addresses used Tornado Cash, which is a "coin mixer," or a software company that acts as an intermediary between the parties and makes it difficult to track transactions, Zuckerman said.
"Anyone can make up the name of any cryptocurrency," he said. โYou could make up a 'Mad Men' token, a 'Succession' token. That is why it is very important that you do your own research. "
