Scene from “Squid Sport” by Netflix
Supply: Netflix
When Bernard heard a few token named after the favored South Korean Netflix sequence “Squid Sport,” which chronicles the lives of cash-strapped adults who play in a lethal event for an enormous jackpot, he did a fast scan on Google to see if the coin was legit.
After catching headlines – however earlier than reading the full articles, lots of which warned of some pink flags across the venture – he determined to take a position his whole life financial savings of $28,000 into SQUID, a coin that billed itself as a “play-to-earn” cryptocurrency. On Monday, the token hit a excessive of simply over $2,860, earlier than plummeting to just about zero, according to CoinMarketCap.
“My rush to purchase this token is for a single concept that went into my mind that ‘Squid Sport’ may be very, very fashionable now, and its token have to be widespread now,” stated Bernard, who lives in Shanghai, and requested to be recognized solely by his English first title as a result of buying and selling in cryptocurrency is of questionable legality in China. “It is a tragedy. I do not know how one can recuperate my loss.”
Bernard tells CNBC that he helps his household and is now anxious about how one can pay his payments.
Transaction records from BscScan appear to show the token’s nameless creators collected least $3.4 million in investor funds. The crypto ecosystem is rife with so-called “rug pull” schemes whereby token founders abruptly abandon their venture and take investor funds with them by swapping the venture coin for money.
“Squid Sport Dev doesn’t wish to proceed working the venture as we’re depressed from the scammers and is overwhelmed with stress,” Squid builders posted Monday in their Telegram channel, which now has greater than 89,000 members.
The token’s white paper and web site have since disappeared, although archived copies of its official landing page and white paper are nonetheless on-line. Twitter has quickly restricted its account as a consequence of “suspicious exercise.” The creators didn’t reply to a number of emails that CNBC despatched to the addresses listed on the net website.
Bernard says he has reached out to the FBI and the SEC about his misplaced funding.
He has additionally reached out to the staff behind the token, in addition to Binance-owned CoinMarketCap, which listed the coin on its web site, each of whom “didn’t take duty” for his loss.
Bernard, who says he has loads of expertise in crypto and computer systems, blames media shops for his funding in SQUID as effectively.
He is not alone. Others have taken to Twitter to say that giving any oxygen to meme cash like this one capabilities as an implicit endorsement.
“On this buying and selling area, everybody will rush,” stated Bernard, “and generally you are feeling FOMO.” That sense of FOMO, or the concern of lacking out, is a standard sentiment amongst crypto merchants who spend money on early-stage altcoins, anticipating an opportunity at massive and fast returns on their funding.
‘Some have a shot at going nuts’
Saurabh Dubey has been excited by cryptocurrencies since 2016. He now works for an accounting agency within the U.S., and in his free time, he usually day trades new altcoins.
Simply previous midnight every day, Dubey seems at new cash being listed on CoinMarketCap and CoinGecko, attempting to determine tendencies primarily based on the charts. He sometimes locations bets of round $100 on cash that he thinks present promise of their preliminary worth actions.
“Some have a shot at going nuts,” he stated.
Dubey says that he used the proceeds from a latest profitable wager on one other meme coin to take a position $250 into SQUID.
“I believed I will play with home cash,” stated Dubey.
This was when SQUID was buying and selling at about 4 cents – effectively earlier than all of the media hype started.
Dubey says he invested in SQUID as a result of it was the second-ranked token on CoinMarketCap’s listing of probably the most just lately listed cash.
“I picked it up as a result of it already had some quantity of quantity and already had some quantity of achieve, and should you take a look at the chart, you will note that the chart mimics the beginning of how SafeMoon received began,” stated Dubey, referring to an altcoin launched in March that appreciated shortly and continues to be being traded.
He famous that his funding was a intestine transfer greater than the rest. “It wasn’t scientific.”
However then Dubey began to note all of the pink flags, lots of which he hoped weren’t that massive a deal.
“The largest flag was that it by no means had a dip,” defined Dubey. “Each coin has to have a dip. There isn’t a means a coin goes up continually for 5 days…The one factor that seemed like a dip was when it stayed on the identical stage.”
The extent of worth appreciation was one other massive concern. “When it hit $1, I used to be like, ‘Okay, 20x is affordable. That may occur.’ When it received to $10, that is after I began considering there’s one thing off,” he stated.
“Most cash that really have a product behind them are barely capable of attain that time,” continued Dubey.
One other pink flag: Not one of the token’s founders might be discovered on LinkedIn, plus its web site and white paper have been full of grammatical and spelling errors.
In the end, Dubey’s publicity was restricted, however traders like Bernard who gambled all their financial savings on this coin need the creators behind the venture to be held accountable.
Bernard, who has been proactive in reaching out to U.S. authorities, says that his arms are tied to take any additional motion, as a result of he cannot file a report with native police.
“In China, it is not so authorized to commerce cryptocurrencies,” Bernard shared with CNBC.
