Squid Game, the most popular Netflix show in history, has taken the world by storm. Unfortunately, an anonymous fraudster schemed to take advantage of the popularity and steal millions from investors in the process.
The unknown fraudster reportedly named the coin Squid as a tribute to the Netflix show. The coin went public on a cryptocurrency trading platform called PancakeSwap last Tuesday.
Within just one week, the coin rose from one penny per coin to over $2,800 percoin. However, CoinMarketCap, another popular trading platform and crypto website, warned that Squid Coin investors should “exercise extreme caution” and “do your own due diligence.”
The warning was prompted when investors reported that they were unable to access the coin’s website. Investors were also concerned when they were unable to contact the coin’s promoters. Altogether, these are likely signs of fraud, as suspected by many others in the crypto space.
Rug Pull Scam
This type of scam is referred to as a “rug pull” scam, where crypto promoters abandon their crypto project after the price skyrockets. This is similar to a “pump and dump” scheme in stocks, where insiders and major shareholders inflate the price of their stock only to dump it after they achieved large returns.
In total, this scam yielded more than $3.3 million of investor losses. CipherTrace, a blockchain and cryptocurrency company, estimates that investors lost more than $100 million in these scams in the first half of this year.
These scams are especially common in the crypto world and will certainly continue to wreak havoc in the future. Thus, we strongly recommend that investors complete due diligence before investing in any product, especially cryptocurrencies.