Squid Game Crypto Token Creators Suspected Of Scam
The hit South Korean Netflix show, Squid Game, inspired a cryptocurrency of the same name, which was launched in October. Wired UK reports that the coin was not affiliated with the TV show, but exploited its soaring popularity to hook investors into a scheme that to many, looked too good to be true.
The sceptics turned out to be correct when the coin soared in value, potentially making an investor who’d put in $300 a return of almost £1m. Then overnight, the $3.36m that the creators made from the project was pulled, and the coin became almost worthless.
The experts who smelled a rat pointed out that the most obvious red flag was that people who bought Squid tokens were unable the sell them. The website was also poorly constructed and full of spelling and grammatical errors.
Speaking to the BBC, Cornell University economist Eswar Prasad said: "It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters.”
Professor Prasad added that the virtual asset sector has almost no regulatory oversight. He said: "In fact, open pump and dump schemes are rampant in the crypto world, with investors often jumping in with eyes wide open, perhaps hoping that they can ride the wave and dump their holdings for a quick profit before prices collapse.”
The Squid Game scam certainly isn’t the first case of apparent fraud on the cryptocurrency market. It is seen as a challenging sector to regulate, with decentralised exchanges making it difficult to verify the identity of buyers or sellers.
The Financial Action Taskforce (FATF) recently issued recommendations that the virtual currency sector be subject to the same regulations and level of scrutiny as the rest of the world’s financial services industry.
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