Saturday, May 21

Pulling the Rug on Squid Game

By: Lexi Blakes

This past September, Netflix’s hit series Squid Game debuted at No. 1 with over 3 billion minutes viewed in its first week of streaming, easily gaining the title of “most popular show in 2021”. Squid Game is a Korean television series that acts as an allegory to greed, capitalism, and the prison of debt. The show explores the extent to which money has power in our lives and how shamelessly society’s wealthiest exploit others. Viewed in more than 142 million households globally, its viewership made it 7-times more popular than the most-watched episode of “Game of Thrones”, breaking boundaries of achievement for entertainment. 

In recent weeks, Squid Game’s message of how money corrupts is clearer than ever. The creators of a new cryptocurrency scam, called the “SQUID Coin Scam”, pulled in 43,000 investors when it began trading on October 26th. Soon thereafter, it vanished in a “rug pull” scheme, stealing a reported $3.3 million from investors. The scam extends an already long list of ways con people are developing new, creative techniques to capitalize on fraudulent cryptocurrency investments.  

Here’s how they did it:

Every good scammer presents themselves as a friend before they reveal themselves as a foe. The SQUID Coin scammers did exactly this by fronting as Squid Game fans hoping to expand the world of Squid Game, by creating SQUID. SQUID was a cryptocurrency that served as a token that could be used for an online tournament game, modeled after the children’s games in the series. Its appeal was immediate, and demand skyrocketed as fans-turned-investors flocked to purchase the digital currency. Starting at just a penny per token, SQUID’s price grew quickly, valuing at $2,861 before investors grew suspicious and experts in the market warned that something may be amiss. 

Upon realizing that a scam could be in progress, CoinMarketCap, a reputable price-tracking website for crypto assets, released a statement on its website that read “Please do your due diligence and exercise extreme caution”. Not long after, the SQUID coin website went dark. Currently, the website has been taken down and its creators are unreachable. 

Crypto scams like this are becoming increasingly commonplace. According to an article written by Khristopher J. Brooks, a reporter for CBS MoneyWatch, “the common crypto scam has accounted for $113 million in investor losses between January and July in 2021”. The goal of a “rug pull” scam is straightforward: pull as much liquidity into a project as possible, then pull all the cash out, hopefully obtaining a small fortune while crushing the capital of those who invested. Much like the SQUID Coin Scam, the scammers often disappear with the funds, leading to huge losses for those involved. 

College Students and Cryptocurrency: High Stakes Make Victimization Deadly.

As interest in cryptocurrency skyrockets, especially at college campuses nationwide, bitcoin continues to represent a ticket to the wealth of tomorrow. An estimated 18% of college students currently own cryptocurrency, and universities are making efforts to accommodate this new frontier. Cornell, NYU and Stanford are even offering courses for students eager to learn and invest. Even more surprisingly, in a poll of 1000 college students done by The Student Loan Report, more than 20% of them reported investing in cryptocurrency using their financial aid money. Experts say this is a dangerous move, and with such high stakes, losses could be devastating. 

Avoiding victimization by a scam can be difficult, but there are a few measures you can take to be vigilant and protect yourself when navigating the cryptocurrency marketplace. First, experts advise new investors to avoid cryptocurrency that has been in the market long enough to gain credibility. Although this is playing it safe, especially in a market that profits off investors searching for high returns in a short time, it is one of the surer ways to avoid getting scammed. Another red flag is when investors are required to lock their money into the investment. In the SQUID Coin Scam, the website required investors to secure their money behind anti-dump technology. Another detail to be observant of is the quality of the project’s website and documents. In SQUID Coin’s case, their investment white paper was full of grammatical errors. One line reads “More importantly, we do not provide deadly consequences apparently! Your experience will only reflect on the joy of winning rewards and sorrow of losing money when the game failed.” During the pandemic, more than 21% of college students or recent graduates invested in cryptocurrency, and more than 70% of them tapped into savings to do it. It seems that Millenials and Gen Z are not looking to abandon cryptocurrency anytime soon and with more than 82,125 crimes in 2020 in the U.S alone—a 24,000% increase from 2016—the stakes continue to rise.

Those who are taken advantage of by scammers are never to blame. In the SQUID Coin Scam, the scammers strategically took advantage of the trend and targeted those new to cryptocurrency. The irony of the crime lies in the TV show they capitalized on. The parallels presented between Squid Game and the SQUID Coin Scam reinforce the notion that where there is money to gain, there is also much that can be lost.  

Sources:
https://www.cnn.com/2021/11/01/investing/squid-game-cryptocurrency-scam/index.html

https://www.cbsnews.com/news/squid-game-cryptocurrency-rug-pull-scam/

https://www.washingtonpost.com/world/2021/11/02/squid-game-crypto-rug-pull/

https://www.psychologytoday.com/us/blog/trust-games/202110/the-unpredictable-popularity-squid-game

https://www.psychologytoday.com/us/blog/beyond-heroes-and-villains/202110/what-squid-game-reveals-about-human-psychology

https://web.archive.org/web/20211031215905/http://squidgame.cash/SquidGameWhitepaper.pdfhttps://www.europeanbusinessreview.com/what-is-a-rug-pull-in-crypto-defi-exploits-explained/

https://www.marketwatch.com/story/as-bitcoin-and-dogecoin-plummet-college-students-and-graduates-insist-theyre-going-long-on-crypto-11621451858

https://www.marketwatch.com/story/as-bitcoin-and-dogecoin-plummet-college-students-and-graduates-insist-theyre-going-long-on-crypto-11621451858

https://www.cnbc.com/2018/03/23/college-students-use-financial-aid-money-to-invest-in-bitcoin.html

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