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Victoria d’Este
Published: January 01, 2025 at 7:51 am Updated: December 30, 2024 at 5:53 am
Edited and fact-checked:
January 01, 2025 at 7:51 am
In Brief
Netflix’s Squid Game’s second season has sparked a crypto market trend, with a spike in tokens referencing the dystopian thriller, raising concerns about potential frauds or rug pulls.
In addition to reviving interest in the series, the second season of Netflix’s Squid Game has also sparked a concerning trend in the crypto market. The market saw a spike in tokens with the name and premise of the dystopian thriller after the show’s December 26 premiere. The integrity of these coins has been questioned by blockchain security companies and community members, who have identified them as possible frauds or rug pulls.
The Crypto Scene and Squid Game Tokens
The Squid Game series is well-known for showing a high-stakes competition in which competitors in dire need of money risk their lives in order to win a massive prize. While the narrative has captivated global audiences, its association with crypto tokens has taken on a less-than-thrilling reality. The rapid appearance of Squid Game-themed tokens has raised concerns over their authenticity and financial safety.
Blockchain security company PeckShield issued a warning on December 27 regarding Squid Game tokens that are in circulation. Investors have already suffered losses as a result of these purportedly fake tokens. A red flag in the cryptocurrency realm, PeckShield identified the deployer as the largest holder of a token that was released on the Base network. The coin has already seen a 99 percent decline in value, indicating a textbook example of market manipulation.
The situation is made more difficult by the emergence of similar scams on the Solana blockchain. When the biggest holdings are concentrated in a small number of wallets, community members have seen fraudulent token releases. When the founders dump their tokens in large quantities, leaving other investors with worthless assets, this structure frequently indicates the possibility of a rug pull.
Lessons from the First Season’s Token Scams
The current wave of Squid Game tokens is reminiscent of a similar trend that followed the show’s first season in 2021. During that period, a token bearing the same name experienced an astronomical price surge of over 45,000%. However, its rapid rise was accompanied by allegations of fraud. Reports emerged that investors were unable to sell their holdings on decentralized exchanges like PancakeSwap, prompting warnings from platforms like CoinMarketCap.
This 2021 incident is a textbook example of a rug pull. After building hype and attracting investments, the token’s creators abruptly exited the project, leaving investors with severe losses.
Blockchain Security Companies Raise the Warning
Recent cautions from PeckShield highlight how often fraud is committed in the crypto business. Although blockchain security companies are essential in spotting and announcing any dangers, their work is frequently reactive rather than proactive. Many investors have already lost money by the time a security notice is sent out.
The characteristics of a fake enterprise were shown by PeckShield’s examination of the Squid Game token on Base. Since the deployer is the biggest holder, the distribution of tokens is unbalanced, making it simple for the inventor to control the market. Concerns have been heightened by the emergence of tokens on Solana with comparable arrangements. The top token holders, according to observers, seem to be connected, indicating concerted attempts to mislead investors.
Community Warnings and Observations
Blockchain explorers and social networking sites are now essential resources for spotting such frauds. A Squid Game-named account on X (previously Twitter) has been aggressively pushing a token, attracting the attention of watchful community members. The biggest wallets linked to the currency, according to observers, are oddly consistent, which is frequently a sign of a possible hoax.
These cautions emphasize how crucial community watchfulness is in the field of decentralized finance. Even while blockchain is transparent by nature, it can be challenging for novice investors to separate scams from legal initiatives due to the sheer number of new projects. Independent experts and members of the community frequently fill this gap, but occasionally, their cautions reach investors too late.
The Broader Context of Crypto Scams
The phenomenon of Squid Game tokens is a component of a larger trend of cryptocurrency market fraud. Scammers have found success using memecoins, which are frequently based on internet events or popular culture. Memecoins lost $40 billion in value in December 2024 alone, highlighting the danger and volatility of these assets.
Memecoins are especially vulnerable to manipulation since their popularity frequently depends on speculative trade rather than their inherent worth. Knowing that the relationship with a well-known brand might draw in unsuspecting investors, scammers take advantage of the excitement around cultural phenomena like Squid Game. Despite several cautions, the quick adoption of Squid Game tokens shows that this strategy is working.
Since cryptocurrency frauds are so common, more regulatory frameworks are required. Decentralized platforms provide accessibility and independence, but they also foster an atmosphere in which dishonest individuals may go largely unchallenged. Regulators must carefully evaluate the special features of blockchain technology in order to accomplish the difficult task of striking a balance between investor protection and innovation.
The absence of a direct connection to Netflix in the instance of Squid Game tokens makes any legal action more difficult. These tokens are frequently introduced by unidentified developers who take use of the brand’s appeal without permission. It is challenging to hold fraudsters accountable because of their anonymity, which emphasizes the necessity of proactive rather than reactive enforcement.
Investor Education as a Preventative Measure
Educating investors is one of the best strategies to stop cryptocurrency fraud. People may make wise selections and save any losses by being aware of the warning signals of fraudulent ventures. Typical warning signs include:
Unbalanced token distribution, in which a disproportionate amount of the supply is controlled by the biggest holders;
A lack of openness about the project’s roadmap and crew;
Tokens cannot be sold or withdrawn, which is a clear sign of a rug pull.
Educational programs from community groups, regulatory agencies, and blockchain security companies can enable investors to successfully negotiate the intricate and sometimes misleading cryptocurrency market.
Disclaimer
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria d’Este
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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