The token with no exit: how scammers made $3.38 million off the series the whole world was watching (Squid Game Token)

In the autumn of 2021, while the entire world was talking about Netflix's "Squid Game," anonymous developers released the SQUID token with a hidden sell-blocking function — you could buy freely, but you could not sell. Within days, the token, named after the most popular series on the planet, surged in price by tens of millions of percent, transforming from a penny asset into a token worth thousands of dollars. The story of SQUID became one of the fastest and most telling examples of how media hype can completely switch off investors' critical thinking.

The project appeared with no connection whatsoever to Netflix or the series' rights holders, yet it aggressively exploited its visual aesthetic and name. The developers promised to launch a game in a "play-to-earn" format, in which token holders would supposedly be able to earn money by competing in tasks inspired by the show's plot. Amid the global frenzy around "Squid Game," the token rose by more than 23 million percent in a week, peaking at $2,861 per unit. The project's website was riddled with grammatical errors, and no independent audit of the code was ever conducted — but these warning signs were lost in the general euphoria.

The first alarm bells rang when some investors tried to lock in profits and sell the token — and could not. The SQUID smart contract contained a hidden function that technically allowed anyone to buy, but blocked selling for ordinary wallets. This created artificial one-way pressure on the price: demand grew while the sell-side supply was blocked, which sustained the illusion of a meteoric rise.

The denouement came on 1 November 2021. The developers withdrew the liquidity pool — roughly $3.38 million — and vanished; the token's price fell from its peak of $2,861 to a third of a cent within minutes. Immediately afterward, the team deleted the project's website and all of its social media accounts. According to analysts, some of the funds were later routed through the crypto mixer Tornado Cash, making them harder to trace.

Despite attention from Binance, which conducted its own investigation and promised to hand the data over to law enforcement, the developers' identities were never established, and no criminal prosecution was ever opened in the case. Investors' funds have not been returned.

Published 20 May 2024