After the SQUID rug pull last week, Binance plans to look into where the money went.
Leading crypto exchange Binance has announced that it would be looking into the circumstances surrounding the alleged rug pull of SQUID, the Squid Game-themed cryptocurrency that left many investors hanging after plummeting from $2,861.80 to $0.0007926 in a matter of minutes.
Based on the popular Netflix series Squid Game (but not affiliated in any way), SQUID launched last Tuesday with a price of $0.01. Three days later, the value of the token had climbed to $4.42, representing a 44,100% increase. The price then skyrocketed to $525 by 9AM on Monday, just six days after launch.
By 9:35AM, the SQUID token had jumped even further to $2,861.80. But here’s the catch — investors could not withdraw their money from decentralized exchange PancakeSwap. Although the team behind the SQUID token had earlier said that it introduced an anti-dumping mechanism to prevent investors from selling, it appears that (regardless of that mechanism), the team had no intention of following any whitepaper plans.
Shortly after the meteoric rise on Monday, the token crashed to zero. Afterward, several of the project’s social media channels went dead. The developers put out a notice on Telegram claiming that they were not responsible for the disruption and would abandon the project.
“Someone is trying to hack our project these days. Not only the Twitter account but also our smart contract… Squid Game Dev does not want to continue running the project as we are depressed from the scammers and [are] overwhelmed with stress.”
The team has since appeared to have disappeared with about $3.4 million in investor funds, with one investor reportedly losing his entire life savings of $28,000.
Binance will hand over whatever information it gets from its investigation to the necessary law enforcement agency.
A spokesperson for the exchange said:
“Our security team has launched an investigation — as a gesture of goodwill — and is exploring options to support the community [...] The Binance Investigations Team will be providing their findings to law enforcement in the appropriate jurisdiction.”
The exchange will also blacklist “addresses to prevent withdrawals from Binance accounts linked to the scam and deploying blockchain analytics to identify the bad actors.”
All That Glitters Is Not Gold
Although the token enjoyed coverage from some of the world’s biggest media outlets, including the BBC and CNBC, it was obvious that Netflix would not dabble into the crypto space without an official announcement.
SQUID's astronomical rise in value and a fear of missing out led many investors to buy the token in hopes of cashing out. Some warning signs were there, but many investors chose to ignore them.
About a week ago, Gizmodo dubbed the project an obvious scam. For one, investors were allowed to put money into the coin but could not get their money out easily. And then, a few days later, the whole thing came crumbling down.
Binance sounded a note of warning to investors, cautioning them to be wary of new and “high-risk” projects.
They said:
“These types of scam projects have become all too common in the DeFi space as speculative crypto investors seeking the next ‘moon shot’ are quick to invest in projects without doing the appropriate due diligence. Speculators seeking potentially unrealistic, high-risk 'lambo' or 'moon shot' opportunities should be wary of the risks of investing in new or unverified assets, whether in crypto or the securities markets.”
