The Squid Game Crypto Scam: How Scammers Made Millions Using the Netflix Show's Fame

Netflix's Squid Game was an instant hit when it debuted back in September 2021. The South Korean series quickly amassed a huge fan following and became an instant hit for its unique concept.

When Netflix’s Squid Game debuted back in September 2021, no one had anticipated that a bloody survival show-themed drama would end up becoming such a cultural phenomenon. From those green tracksuits to the red light, green light game, pretty much people from all over the world were obsessed with the show and its gruesome premise, which offered a stark insight into the world we live in and to what extent humans will go to make their ends meet.

And the ‘to make their ends meet’ part materialized in the form of a cryptocurrency scam where a bunch of cybercriminals used the show to scam people of millions of dollars. It began with the launch of a crypto coin/token called the Squid Game but not affiliated with the Netflix series in any way. The makers of the coin then offered the buyers a ‘play-to-earn,’ where the players could exchange this Squid to play online games and earn more tokens which can then be exchanged for other cryptocurrency or fiat money (via BBC).

The supposed games were to begin in November 2021 and as per the issue document, it was advertised as a Ponzi scheme, where the more people joined in the larger was to be the pool of money. Initially, the said coin was worth less than a dollar, but suddenly it increased by over a thousand percent (310,000% according to Forbes) and people went on to buy the coin before it could cross the one-dollar mark. As is the norm in the world of cryptocurrency, the Squid went on a dramatic increase from $1 to $5 and then went on to $600, at an all-time peak of $2,861 (via WIRED). However, this is when tragedy struck.

It is not unusual for a cryptocurrency to suddenly explode, however, as people have found out before too, this is a case of the classic ‘rug pull’ scam.

As the Squid, aka the Squid Game coin, rose to unimaginable levels, people who had purchased the coin began expressing doubts about the coin. Apprehensive of the whole thing, people tried to sell it but were unsuccessful. Others attempted to try the buying marbles through a pay-to-play game organized by the coin’s creators, in order to sell the coin (via WIRED).

However, all attempts to sell the coin, either through the game or without it remained unsuccessful.

This led to widespread coverage from major media and on November 1, 2021, the thing that the buyers were fearing for happened. The Squid Game token/ coin lost all of its value at about 6 a.m. EDT when the price of a then $2,861 coin suddenly plummeted to less than half a penny. Thus, this wiped out over $6 billion in market value within 15 minutes, as CoinMarketCap reported (via Forbes).

This crash became evident after the users started noticing that the developers of the coin had terminated the project just before the online games were to be launched. They furthermore hid all the transaction details through a protocol called Tornado Cash (via Forbes), which is a cryptocurrency mixer that helps the user to obscure the origin and the destination of their purchases, enabling them to use a security key to withdraw crypto into a different wallet.

Soon enough, the token’s website, which contained multiple grammatical errors and mistakes (an obvious red flag), went offline, and all of its social media accounts, which were until now promoting the tokens, ended up disappearing as well (via BBC).

The Squid Game crypto scam was not the first of its kind, since the emergence of this online trading mechanism, users generally face some or the other kind of scam. However, this was one of the rare times when cybercriminals targeted people by the use of an alleged affiliation to a series. Soon after the crash of the token, users were still not able to sell their tokens and it was then warned that the token had no affiliation to the Netflix show but rather was a separate entity (via Forbes and WIRED).

Taking advantage of the liquidity pool that exists between the tokens issued and Binance’s BNB token on the cryptocurrency exchange, the scammers created and issued the Squid tokens yet kept the supply for themselves. This allowed them to control the value of the tokens and later, they exchanged them for the BNB tokens, taking off with millions of dollars of funds (via WIRED). As reported by Forbes, they apparently cashed out approximately $2.5 million worth of finance coin tokens. However, as Gizmodo reported (via BBC), the scammers made an estimated $3.38 million through the Squid Game token.

This incident serves as a stark reminder of the dangers associated with unregulated digital assets and the cryptocurrency market. Just as the series, Squid Game, showed the lengths people would go to for money, the scammers too did the same albeit utilizing a less deadly way. Thus, channeling the theme of the series and using its name, the