Cryptocurrency exchange Binance is reportedly investigating the Squid Game SQUID/USD token in order to pursue the matter with law enforcement.
What Happened: The largest cryptocurrency exchange by volume, Binance, is looking into the Binance Smart Chain token Squid, a play-to-earn token based on Netflix Inc’s NFLX hit show “Squid Game,” as per a Barron’s report.
Squid’s value plunged to near zero from $2,861 in almost 5 minutes. The project saw a gain of nearly 83,000% even as it was labeled a scam by multiple reports.
“These types of scam projects have become all too common in the DeFi space,” a Binance spokesperson told Barron’s.
At press time, SQUID rose 968% to $0.0423 over 24 hours, outperforming Bitcoin BTC/USD and Ethereum ETH/USD by far, which traded mostly muted at the time of writing. For the week it is down 78.94%. CoinMarketCap cautioned investors that they have received multiple reports that users are not able to sell the token in Pancakeswap.
“There is growing evidence that this project has rugged. Please do your own due diligence and exercise extreme caution,” read the warning from the price-tracking website.
See Also: How To Buy Binance Coin (BNB)
Why It Matters: Binance is the company associated with the BSC blockchain on which SQUID was based. Pancakeswap is also built on the Binance Smart Chain.
A Shanghai-based investor lost his entire life savings of $28,000 in SQUID, reported CNBC.
“My rush to buy this token is for a single idea that went into my brain that ‘Squid Game’ is very, very popular now, and its token must be popular now,” said the investor, who asked only to be identified by the English first name Bernard, as per CNBC.
“It’s a tragedy. I don’t know how to recover my loss,” said Bernard.
Binance has frozen and blacklisted wallet addresses linked to the developers of SQUID and the platform is “deploying blockchain analytics to identify the bad actors,” reported Barron’s.
The developers of SQUID appear to be using a “coin mixer” called Tornado Cash to cover tracks, as per Binance.
“Our security team is currently tracing those funds,” said the Changpeng Zhao-led company to Barron’s.
Binance reportedly said it would hand over the investigation's findings to law enforcement in the “appropriate jurisdiction.” However, it said there’s little it can do to recover lost funds.
Price Action: On Wednesday, Netflix shares closed nearly 1.6% higher at $688.29.
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