In late December, Netflix released the second season of Squid Game, its most-watched series to date, reigniting global fascination with the dystopian thriller.
The show, centered on financially desperate contestants risking their lives for a life-changing prize, spurred a surge of crypto tokens bearing its name.
However, the enthusiasm was quickly marred by warnings from blockchain security firm PeckShield, which identified several of these tokens as fraudulent.
On 27 December, PeckShield flagged a Squid Game-themed token on Ethereum's Base platform, noting the deployer's disproportionate control over the supply.
The token's value plummeted by 99% shortly after launch.
#PeckShieldAlert Beware of scam #SquidGame tokens circulating in the wild.
We have detected a fraudulent #SquidGame token deployed on #Base just 3 hours ago, with the deployer as the largest holder. The token has dropped 99%. pic.twitter.com/EIdaUldzaF
— PeckShieldAlert (@PeckShieldAlert) December 27, 2024
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Similar activity was observed on Solana, where identical top holders across different tokens hinted at coordinated price manipulation schemes, often ending in rug pulls.
A specific Squid Game-branded account on X (formerly known as Twitter) has also come under scrutiny for aggressively promoting dubious tokens, with the distribution of holdings among top wallets raising red flags for potential scams.
A community member shared the top holders on X and warned members not to get rugged.
The resurgence of Squid Game-themed tokens comes amidst a broader trend of crypto scams and hacks in 2024.
Over $2.3 billion has been lost to such schemes this year, a 40% rise from 2023, as high-profile social media accounts continue to be hijacked to promote fraudulent tokens.
This troubling pattern underscores the persistent risks in the cryptocurrency market, where hype often paves the way for exploitation.
Dexscreener shows the squid-game inspired tokens
Unfortunately, this is not the first time Squid Game has been linked to crypto scams.
Following the show’s debut season in 2021, a wave of fraudulent token launches left investors facing significant losses.
Despite having no official ties to Netflix or the series creators, one such token, SQUID, garnered immense attention, with its value reportedly soaring over 75,000% at its peak.
In a particularly infamous case, SQUID experienced gains exceeding 45,000%, only for investors to discover they could not sell their holdings on decentralized exchanges like PancakeSwap.
Warnings from platforms like CoinMarketCap soon followed, but not before the incident became one of the most notorious rug pulls in crypto history.
This debacle underscores the dangers of investing in speculative tokens, especially those lacking liquidity and transparency, and serves as a cautionary tale for anyone navigating the volatile world of cryptocurrency.
The rise and fall of the SQUID token stands as a cautionary tale in the crypto world.
Despite experiencing meteoric price spikes, the token's journey ended abruptly in a notorious rug pull—a scam where developers abandon the project and abscond with investors' funds.
Within minutes, SQUID’s value plummeted to near zero, leaving investors with significant losses.
By 2023, Binance, one of the world's largest cryptocurrency exchanges, announced an investigation into the SQUID token crash, confirming suspicions of fraud.
The exchange identified the token as a likely scam, emphasizing how opportunistic projects exploit popular culture to lure unsuspecting investors.
A spokeswoman for Binance explained:
“These types of scam projects have become all too common in the DeFi space.”
Binance froze and blacklisted wallet addresses linked to the developers and deployed blockchain analytics to trace transactions, pledging to share its findings with law enforcement.
However, the recovery of lost funds remains unlikely.
As Squid Game Season 2 reignited global interest, questions have resurfaced about whether similar scams will follow.
Mati Greenspan, founder of Quantum Economics, said:
“Clearly, if Binance is investigating it for fraud, then it's probably not a great investment.”
He warned:
“Another clue is that the project's name is clearly an unsanctioned ripoff of the popular Netflix show, a remarkable show of bad faith by the tokens creators. Investing in tokens can be extremely risky but sometimes quite lucrative if you know what to look for. Investors should research the projects team.”
While meme coins and pop culture-inspired tokens can seem like lucrative opportunities, they often carry immense risk.
Investors are advised to exercise caution, conduct thorough research (DYOR), and avoid chasing speculative hype.
Avi Iluz, CEO of Gems Trade, elaborated:
“Investors are returning to the SQUID token largely due to its hype and thematic appeal, driven by speculation for quick profits and the fear of missing out (FOMO), despite its troubled history.”
With Season 3 on the horizon, will the trend of scam tokens fizzle out, or could the buzz fuel even more elaborate schemes?
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