The “Squid Game” token cost an investor $ 28,000 after the coin plummeted

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Scene from Netflix’s “Squid Game”

Source: Netflix

When Bernard heard of a token named after the popular South Korean Netflix series “Squid Game,” which chronicles the lives of cash-strapped adults playing in a deadly tournament for a big jackpot, he said. did a quick Google scan to see if the part was legitimate.

After making headlines – but before reading the full articles, many of which warned of red flags around the project – he decided to invest all of his savings of $ 28,000 in SQUID, a coin that was coming up. as a “game to win”. cryptocurrency. On Monday, the token peaked at just over $ 2,860, before dropping to near zero, according to CoinMarketCap.

“My rush to buy this token is for one idea that occurred to me that ‘Squid Game’ is very, very popular now, and its token must be popular now,” said Bernard, who lives in Shanghai. , and asked to be identified only by his English first name as cryptocurrency trading is questionable legality in China. “It’s a tragedy. I don’t know how to recover my loss.”

Bernard tells CNBC that he is supporting his family and is now worried about how to pay his bills.

BscScan transaction records appear to show anonymous token creators raised at least $ 3.4 million in investor funds. The crypto ecosystem is full of so-called ‘carpet pull’ programs in which token founders abruptly abandon their project and take investor funds with them by exchanging the project coin for cash.

“Squid Game Dev does not want to continue running the project because we are depressed by the crooks and overwhelmed with stress,” Squid developers said Monday on their Telegram channel, which now has more than 89,000 members.

The token’s whitepaper and website have since disappeared, although archived copies of its official landing page and whitepaper are still live. Twitter has temporarily restrict his account due to “suspicious activity”. The creators did not respond to multiple emails CNBC sent to addresses listed on the website.

Bernard says he contacted the FBI and the SEC about his lost investment.

He also contacted the team behind the token, as well as Binance-owned CoinMarketCap, which listed the coin on its website, both of which did not “take responsibility” for its loss.

Bernard, who says he has a lot of experience in cryptography and computers, also blames the media for his investment in SQUID.

He is not alone. Others have taken to Twitter to say that giving coins like this oxygen works like implied approval.

“In this space of exchange, everyone is going to rush,” Bernard said, “and sometimes you feel FOMO.” This feeling of FOMO, or the fear of missing out, is a common sentiment among crypto traders who invest in early stage altcoins, hungry for the chance of large and quick returns on their investment.

“Some have a chance to go crazy”

Saurabh Dubey has been interested in cryptocurrencies since 2016. He now works for an accounting firm in the United States and in his spare time he regularly trades new altcoins.

Just after midnight each day, Dubey examines new coins listed on CoinMarketCap and CoinGecko, trying to identify trends based on charts. He typically places bets of around $ 100 on coins that he believes are promising in their initial price movements.

“Some have a chance to go crazy,” he said.

Dubey says he used the proceeds of a recent successful bet on another even coin to invest $ 250 in SQUID.

“I thought I would play with the house money,” Dubey said.

This was back when SQUID was trading at around 4 cents – long before all the hype started.

Dubey says he invested in SQUID because it was the second token on CoinMarketCap’s most recently listed coin list.

“I chose it because it already had some volume and some gain, and if you look at the graph you will see that the graph mimics the start of how SafeMoon has taken off, ”Dubey said, referring to an altcoin launched in March that has appreciated rapidly and is still being traded.

He noted that his investment was more of an instinctive gesture than anything else. “It wasn’t scientific.”

But then Dubey started to notice all the red flags, many of which he hoped weren’t that important.

“The biggest flag was that there had never been a dip,” Dubey explained. “Every piece has to have a trough. There is no way a piece would go up constantly for five days… The only thing that looked like a trough was when it stayed at the same level.”

Another big concern was the level of price appreciation. “When it hit $ 1, I was like, ‘Okay, 20x is reasonable. It can happen. “When it got to $ 10, that’s when I started to think there was something wrong,” he said.

“Most of the parts that actually have a product behind them are barely able to reach that point,” Dubey continued.

Another red flag: None of the token’s founders could be found on LinkedIn, and its website and whitepaper were filled with grammar and spelling mistakes.

Ultimately, Dubey’s exposure was limited, but investors like Bernard who staked all their savings on this piece want the creators behind the project to be held accountable.

Bernard, who has been proactive in contacting US authorities, said his hands were tied to take further action as he could not file a report with local police.

“In China, it’s not that legal to trade cryptocurrencies,” Bernard told CNBC.



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