Cryptocurrencies are all the craze recently. Everyone wants a piece of the pie and is willing to actually put in a serious amount of investment into it.

While there are many legitimate cryptocurrencies out there, many people take undue advantage of people’s faith in cryptocurrencies. There are many scammers out there that have managed to steal millions of dollars from investors.

What Is Squid Coin?

Based on the South Korean sensation “Squid Game,” Squid Coin was launched as a pay-to-play currency. A pay-to-play currency is one where an investor buys a token that can be used in an online game where you can earn more tokens. These tokens can then be exchanged for international currency or even other cryptocurrencies.

In just a matter of days, the price skyrocketed. At the start of the week, it was trading at $1 per coin, and by the end of the week, the price had reached $2,586. This is an extraordinary rise in value which had many people thinking. Early on, many experts were skeptical of the currency because of the parameters around which it operated.

Where The Problems Started

For starters, once you bought the coin, there was no option to sell it. You either held onto it or cashed it out. Known in the industry as a ‘rug-pull,’ the developers managed to reel in many buyers off the basis of the show’s popularity. All trading activity was stopped, and the coin simply vanished into thin air.

Furthermore, many critics observed that the coin’s website was extremely suspicious. There were countless grammatical errors in the content, and the website itself was very poorly constructed. The alarm bells should have been sounded off much earlier, especially since the signs were so obvious.

Failure to do so resulted in each and every investor losing their money. The creators might have made off with the money, but the damage done to the investors as well as the already delicate reputation of cryptocurrencies is much deeper.

So much of the population is still incredibly skeptical about cryptocurrency, and with scams like these happening in broad daylight, this skepticism doesn’t seem to be going anywhere any time soon. Stuff like this doesn’t work in favor of crypto enthusiasts who want the medium to be more readily accepted.

Unfortunately, this is one of the realities of dealing with an unregulated form of payment. There is no proper way to apprehend scammers who can rather bravely make off with someone’s hard-earned money like this.

The Aftermath

Squid Coin was being traded on what is known as a decentralized crypto exchange, where a platform is made available for the currency to be traded without any oversight. These exchanges included PancakeSwap and DODO that permit its users to buy cryptocurrency directly from the people selling it without any middleman, providing a form of security during the trade.

Eswar Prasad, a Cornell University economist, told the BBC that “It is one of many schemes by which naïve retail investors are drawn in and exploited by malevolent crypto promoters.”

He went on to say that “In fact, open pump and dump schemes are rampant in the crypto world, with investors often jumping in with eyes wide open, perhaps hoping that they can ride the wave and dump their holdings for a quick profit before prices collapse.”

This brings to light the risks of trading cryptocurrencies that many people have been very vocal about for a while now.