Millions of dollars vanished in a matter of minutes after investors piled into a new cryptocurrency inspired by “Squid Game,” the popular Netflix survival show, only to watch its value plunge to nearly zero in a few short hours.
The cryptocurrency, called Squid, began trading early last week at a price of just one penny per token. In the following days, it drew attention from a number of mainstream media outlets. By early Monday, it was trading at $38 a token on a cryptocurrency exchange called Pancakeswap.
Then Squid went on a roller-coaster ride. In a 10-minute span later on Monday, the token’s value grew from $628.33 to $2,856.65, according to CoinMarketCap, a crypto data tracking website. Then, five dramatic minutes later, it traded at $0.0007.
More than 40,000 people still held the token after the crash, according to BscScan, a blockchain search engine and analytics platform. One of them was John Lee, 30, of Manila. He said he had spent $1,000 on the Squid tokens, thinking “somewhat instinctively” that the token had been authorized by the Netflix show.
Mr. Lee said he was surprised when he learned that he was not be able to sell the token immediately. He can sell the tokens now. But he’d be left with “almost nothing,” he said.
Sharon Chan, a spokeswoman for Netflix, declined to comment.
The reasons behind Squid’s collapse, reported earlier by Gizmodo, weren’t clear. Neither were the identities of its creators. Its website appeared to have been taken offline. An email sent to its developers bounced back. Its social media channels appeared to have been shut down. Its Twitter account was not accepting direct messages or replies.
Pancakeswap, the trading platform, did not respond to a request for comment.
In the aftermath, the cryptocurrency world is mulling whether Squid was what Molly Jane Zuckerman, head of content at CoinMarketCap, called a “rug pull.” In a rug pull, she said, a cryptocurrency’s backers effectively leave the market and take their investors’ funds with them.
Updated
Nov. 1, 2021, 6:50 p.m. ET
“I’m not seeing the developers coming online and saying, ‘hold with us, so sorry, we’ll figure this out,’ which is what happens when there’s some sort of non-malicious problem,” she said.
Squid’s crash highlights the regulatory gaps over cryptocurrencies, as government agencies and private firms rush to get a grip on the volatile yet increasingly popular investment.
Developers of meme coins like Squid rarely identify themselves, said Yousra Anwar, an editor at CoinMarketCap. If investors suspect financial wrongdoing, they could get passed from country to country, or from regulator to regulator, to investigate.
What to Know About ‘Squid Game’
Have you heard about this dystopian South Korean drama yet? It was released on Netflix on Sept. 17 and has quickly earned a worldwide audience. Here’s a look at this unique hit: