Search
Menu Menu

Squid Game crypto currency scam shows the pitfalls of investing

A digital token based on the hit Netflix show Squid Game has lost 99.9% of its value overnight in a move experts are calling a ‘scam’. It is an example of the potential dangers of digital investment, which continues to grow in popularity with Gen Z.

I’m sure that you’ve watched the hit Netflix series Squid Game by now, a fictional drama that sees 600 financially desperate people compete against one another for a huge cash prize. There are six rounds based on South Korean children’s games and if a player loses in any round, they die.

Squid Game is a mix of Hunger Games and Fortnite’s ‘battle royale’ mode, with a hint of horror thrown in.

Despite its heavy anti-capitalist message the show has managed to permeate every corner of mainstream pop culture, so much so that Pop! Vinyl figurines are now available to purchase online, protestors at COP26 are dressing as guards from the show, and even cryptocurrencies based on its branding can be bought into.

Not that you should do so, mind. News broke this morning that the Squid Game digital token plummeted in value in an instant, dropping by 99.9% from a high of $2,856 per unit. The sudden drop serves as a warning to those eager to get involved in cryptocurrency.

Rewards are lucrative and the stakes are high – but everything can be lost in mere moments. We’ve already seen volatile stock markets lead to financial turmoil this year with GameStop and Reddit, as more start-up companies try their hand at bringing Wall Street trading to the masses.

While democratising these previously impenetrable markets is good for us regular folk, they also expose inexperienced investors to serious risk and potential bankruptcy. You’d wish you were in the real Squid Game if you just chucked several thousand pounds down the drain on a phoney digital token currency.


What’s the deal with Squid Game digital tokens?

This dramatic drop in currency value is known as a ‘rug pull’ by crypto investors, whereby those buying into a currency cannot resell it until it’s too late and the value has gone down. Normally, buyers can later trade their currency for other crypto investments, or virtual tokens in other properties or games.

The apparent intention of this Squid currency was for it to be used in an online game based on the show, set to launch later this month. Experts say that it was likely a set-up to squeeze money out of regular investors and reports from Gizmodo estimate that the developers of the Squid digital token have made at least £2.84 million.

With news of the sudden value drop, the original website for the token is no longer available, and all promotional social media accounts have mysteriously disappeared.

According to a conversation with the BBC, Cornell University economist Eswar Prasad says that a big reason for these types of schemes is that cryptocurrency trading is largely unregulated.

‘It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters,’ he explained. ‘Open pump and dump schemes are rampant.’

So, what can consumers and traders do to protect themselves? A good place to start would be avoiding any schemes that look shady or are blatantly built off the hype of an external brand, and looking out for errors or small print that blocks you from trading currency units you’ve purchased.

Reporters have also noted that the website for Squid currency was filled with grammatical errors and typos – another tell-tale sign that everything may not be as it seems.


What else is changing in the cryptocurrency space?

Digital currency and trading virtual assets can be confusing topics to cover or understand if you’re not financially savvy.

Various different types of online commerce have risen the ranks in the last decade, namely bitcoin, cryptocurrency, NFTs, and instant access stock trading, allowing many more people to get involved in industries that were previously reserved exclusively for professional traders.

This shift has lead to disruption in the standard practice of stock markets, with artificially inflated brands and unique, meme-based crypto bubbles. As previously mentioned, the subreddit r/wallstreetbets attempted to take on the dying stock of GameStop, with some bizarre results that demonstrated how the internet has changed trading in general.

It allows for more of us to learn the basics of trading and potentially make money but, similarly, it also opens the doors for a less regimented and more turbulent market. There is a far greater risk of scams, ill judged investment, and smaller trading apps having to file for bankruptcy due to a lack of funds and misleading customers.

Squid currency is just the latest example of fad-based scamming in a market that’s still in its democratic infancy. The message from this story is obvious – be careful where you put your cash, and keep your wits about you when making investment choices.

 

Thred Newsletter!

Sign up to our planet-positive newsletter

Accessibility