Gerry Palmers Tech 11.04.2021 22:Nov PM EDT

Squid Game Crypto Coin Surges 600% After Crash, Scam Reports--Investigation Starting

Even with news that the Squid Game crypto was a massive scam with its meteoric rise and sudden fall to near-zero value, people strangely continue to invest in the asset.

According to CoinMarketCap live data, prices of the Squid Game coin, SQUID, still rose 600 percent after the crash and is now trading at $0.078803 or an increase of 338.60 percent in the last 24 hours. It has a trading volume of $101.52 million and a maximum supply of 800 million SQUID coins.

Binance Launches Probe on Squid Game Crypto

This comes after crypto exchange Binance started its probe on SQUID, which was inspired by the hit Netflix series about a deadly competition involving children's games.

A Binance spokesperson told Gizmodo that the crypto exchange has launched an investigation and explored options to support the community. Binance is set to blacklist addresses to prevent withdrawals from Binance accounts linked to the SQUID scam and deploy blockchain analytics to identify the culprits.

The investigation team, the Binance spokesperson added, will provide their findings to law enforcement for further action.

SQUID had a massive debut on Monday, November 1, surging by 380,000 percent to $38, which was absolutely phenomenal yet unusual, CoinMarketCap further reported. In the next hours, the price of SQUID further skyrocketed from $89 to $2,861.80.

The SQUID coin's protocol was developed on the Binance Smart Chain (BSC) and launched by unknown developers who promoted the coin using a poorly constructed "white paper" and several social media accounts.

Then, the unthinkable happened. In five minutes, SQUID's value crashed by a whopping 99 percent, plummeting to $0.0007926.

Experts Suspect Massive "Rug Pull," Around $3.4 Million Pocketed

Experts observed that the SQUID price behavior was a sign of a "rug pull," or when developers abandon their crypto project and pocket the investors' funds. When Gizmodo noticed in an earlier report that it was some sort of a scam, investors could not retrieve their investments, a clear sign that there was an malicious intention to dupe them.

The Squid Game token's website had been taken offline, and users could not sell the coin on Pancakeswap. An anti-dumping mechanism that was enforced by the developers prevented users from selling the token.

Those shady developers then released a statement on Telegram, announcing they were stepping back from the project, claiming that they "were depressed from the scammers" and were "overwhelmed with stress." They added they would "enter a new stage of community autonomy," while offering their apology "for any inconvenience."

According to Gizmodo, they seem to have made off with around $3.4 million in investor funds.

In a CoinMarketCap interview, a SQUID coin holder disclosed losing "all what I have in this project" after buying 5,000 SQUID at $1 apiece. The investor added that he doesn't trust them anymore. Another investor claimed to have lost his $28,000 life savings.

Lessons for Crypto Investors

Others said that the experience is a "valuable lesson" for investors "to not just jump into meme coins." They urged that news outlets should not pay attention to "scammer-type tokens." Likewise, crypto investors are encouraged to do their due diligence in scrutinizing a project's website, and check if information or details about the founders or developers are prominently displayed. It should also have legitimate profile links on other social media platforms or websites, per CoinMarketCap.

On the SQUID website, the top executives' names appeared fictitious, as they don't have corresponding LinkedIn profiles or turned up empty on Google searches.