Scene from Netflix’s “Squid Game”
When Bernard heard about a token named after the popular South Korean Netflix series “Squid Game”, which records the lives of adults with buckles playing for a big jackpot in a deadly tournament, he quickly scanned Google for the Coin was real.
After making headlines – but before reading the full articles, many of which warned of some red flags surrounding the project – he decided to invest all of his $ 28,000 savings in SQUID, a coin that will save itself referred to as “play-to-earn”. Cryptocurrency. On Monday, the token hit a high of just over $ 2,860 before crashing to near zero. according to CoinMarketCap.
“My rush to buy this token is one single idea that crossed my mind 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 in China is of questionable legality. “It’s a tragedy. I don’t know how to make up for my loss.”
Bernard tells CNBC that he supports his family and is now worried about how to pay his bills.
Transaction records from BscScan are displayed The anonymous creators of the token raised at least $ 3.4 million in investor funds. The crypto ecosystem is full of so-called “rug-pull” systems, in which token founders abruptly give up their project and take investor money with them by exchanging the project coin for cash.
“Squid Game Dev does not want to continue the project because we are depressed by the scammers and overwhelmed by stress,” says Squid developer posted on her Telegram channel on Monday, 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 White paper are still online. Twitter has temporarily restricted his account for “suspicious activity”. The creators did not respond to multiple emails CNBC sent to the addresses listed on the website.
Bernard says he reached out to the FBI and SEC about his lost investment.
He has also reached out to the team behind the token as well as CoinMarketCap owned by Binance, which listed the coin on their website, both of which have “taken no responsibility” for its loss.
Bernard, who says he has a lot of experience with crypto and computers, also blames media for his investment in SQUID.
He is not alone. Others have visited Twitter to say that delivering oxygen to meme coins like these acts as implicit endorsement.
“Everyone will rush into this trading room,” said Bernard, “and sometimes you feel FOMO.” That feeling of FOMO, or the fear of missing out, is a common belief among crypto traders who invest in early stage altcoins for a chance of big and quick returns.
Saurabh Dubey has been interested in cryptocurrencies since 2016. He now works for an auditing company in the USA and in his spare time he trades new altcoins every day on a regular basis.
Every day shortly after midnight, Dubey examines new coins listed on CoinMarketCap and CoinGecko and tries to identify trends based on the charts. He usually places bets of around $ 100 on coins that he believes are promising in their initial price movements.
“Some have a chance of going crazy,” he said.
Dubey says he used the proceeds of a recent successful bet on another meme coin to invest $ 250 in SQUID.
“I thought I was playing house money,” Dubey said.
At this point, SQUID was trading at around 4 cents – long before the media hype began.
Dubey says he invested in SQUID because it was the secondary token on CoinMarketCap’s list of recently listed coins.
“I included it because it already had some volume and already some gain, and if you look at the diagram, you will see that the diagram mimics the beginning of the how SafeMoon started, “Dubey said, referring to an altcoin launched in March that quickly appreciated in value and is still trading.
He noted that, more than anything, his investment was a gut decision. “It wasn’t scientific.”
But then Dubey noticed all the red flags he hoped a lot of them weren’t that big a deal.
“The biggest flag was that there was never a break-in,” explained Dubey. “Every coin must have a dip. There is no way a coin goes up consistently for five days … The only thing that looked like a dip was if it stayed at the same level.”
The size of the price increase was another major problem. “When it hit $ 1, I thought, ‘Okay, 20x is reasonable. This can happen.’ When it got to $ 10 I thought something was wrong, “he said.
“Most coins that actually have a product behind them can barely reach this point,” continues Dubey.
Another red flag: none of the token’s founders were on LinkedIn, and their website and white paper were full of grammatical and spelling errors.
Ultimately, Dubey’s commitment has been limited, but investors like Bernard, who have put all of their savings on this coin, want the project’s creators to be held accountable.
Bernard, who has been proactive in reaching out to US authorities, says his hands are tied to take further action as he cannot file a complaint with local police.
“In China, trading in cryptocurrencies is not that legal,” Bernard told CNBC.