In the Netflix hit series “Squid Game,” characters gambled with their lives. The price of playing the game in the real world may not be as steep as a life, but for many people who piled their money into Squid, a once red-hot cryptocurrency named after the show, the financial loss has still been significant.
On early Monday morning, the value of a Squid coin collapsed from a high of just over $2,860 to effectively zero as cryptocurrency traders watched the token’s unknown creators clean out some $3.3 million in funds, according to digital records.
The maneuver, known as a “rug pull” in cryptocurrency circles, occurs when a token’s creators abandon the project by exchanging many virtual coins for real-world cash. They quickly drain liquidity from the product, effectively driving the coin’s value to zero and leaving other investors holding the bag in an apparent scam.
“Squid Game Dev does not want to continue running the project,” the developers wrote on their Telegram channel Monday, saying they were “depressed” by scammers and “overwhelmed with stress.”
Launched late last month, the new cryptocurrency skyrocketed in value as investors rushed to buy tokens hyped by promotions on multiple social media platforms. The project’s Twitter account — since restricted by the social network because of “unusual activity” — amassed more than 57,000 followers, and its Telegram channel had more than 71,000 subscribers.
Between Oct. 26 and Monday, the value of a Squid coin rose by more than 23 million percent, from a little more than a mere cent to $2,861.80.
Squid’s popularity came amid a robust parody cryptocurrency market. Shiba Inu and Dogecoin, two canine-themed tokens, have seen their prices sharply take off in the past year.
A “play-to-earn” cryptocurrency, Squid purported to let buyers partake in online versions of the games depicted in the South Korean dystopian thriller. In the show, the poor and downtrodden play children’s games such as tug of war in hope of winning millions in prize money, but those who lose are brutally killed for sport. Netflix did not immediately return a request for comment; it has reportedly said it is not affiliated with the cryptocurrency.
The token’s creators wrote in an investment white paper, strewn with grammatical errors, saying that their games do not “provide deadly consequences.”
“Your experience will only reflect on the joy of winning rewards and sorrow of losing money when the game failed,” read the paper, which has since been taken offline.
Emails sent to Squid’s developers could not be delivered early Tuesday.
Many cryptocurrency observers had sounded the alarm about Squid even before the “rug pull,” citing warning signals such as social media accounts that did not allow followers or subscribers to comment and the amateurish white paper. CoinMarketCap, a data provider, had urged potential traders to take “extreme caution” after Squid buyers told the platform that their coins could not be sold.
While scams have occasionally plagued cryptocurrency traders, there have been numerous attempts to make investing in digital coins more consumer-friendly. Bank regulators in the United States are working to help financial institutions hold on to virtual assets, and the first exchange-traded fund tracking the bitcoin futures market debuted in mid-October.
The last message on Squid’s Telegram channel, posted shortly after funds were drained from investors, tried to divert blame elsewhere.
“Sorry again for any inconvenience been made for you,” the message read. “If any strange starts coming out of it, ignore it. Thanks!”