TOPLINE The price of a viral cryptocurrency inspired by the hit Netflix show Squid Game plummeted early Monday after reports surfaced that the project's anonymous founders had shut down the token and fled with investor funds, the latest cautionary tale for traders chasing the nascent crypto market's meteoric gains. According to cryptocurrency statistics website CoinMarketCap, the price of the so-called Squid Game token plummeted from more than $2,861 to less than half a cent at around 6 a.m. EDT, wiping almost $6 billion in market value in less than 15 minutes.
The crash began when users noticed wallet activity indicating that the token's alleged developers had terminated the project before its widely publicized online game had even launched, cashing out approximately $2.5 million in binance coin tokens while concealing transaction details using the Tornado Cash protocol.
After the breakdown on Monday morning, Squid token's website and social media accounts were down; Twitter had previously banned its account owing to "some strange behaviour."
After the token's stratospheric surge last week, cautionary flags swiftly emerged, with CoinMarketCap warning on Friday that many users have reported being unable to sell their tokens on decentralized exchanges.
The website went on to say that, while the project was obviously inspired by the Netflix program of the same name, it was "unlikely to be associated with the official [intellectual property]," and that traders should "perform their own due research and exercise care while dealing!"
IMPORTANT BACKGROUND INFORMATION
The Squid cryptocurrency has soared 310,000 percent since its inception last week, fueled by huge frenzy among retail crypto investors, despite the fact that nothing was known about the project or its founders. The coin's website promised that its Squid Game-based online game will start this month, but users immediately noted that the project's whitepaper (a document that details a token's specs and is standard in the cryptocurrency market) was missing. It featured various grammatical and typographical problems, and its alleged creators didn't have any social media accounts. The coin went on presale earlier this month and was said to have sold out in "a second," according to the whitepaper.
TANGENT SQUID GAME
isn't the only much anticipated token to plummet to zero. In June, a cryptocurrency backed by billionaire Mark Cuban lost nearly all of its value as falling prices revealed a fault in the token's architecture that offered an arbitrage opportunity, allowing investors to gain a limitless amount of money by continuously buying and selling the token. The cryptocurrency has failed to recoup any of its lost value.
LARGE NUMBER
2.6 trillion dollars. According to CoinMarketCap, the crypto market's value has increased about sixfold in the past year as a result of institutional adoption and inflationary worries.
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