The Squid Game (SQUID) token has turned out to be a scam under investigation by Binance.
Inspired by the famous Korean TV series, but only exploiting its name in a blatant violation of copyright law, it has earned its creators $3 million.
Squid Game scam, Binance cooperates with the authorities
After the token’s value went down to zero, investigations began. Binance has indicated that it is actively cooperating with law enforcement to try to find out who the scammers are, and possibly recover some of the stolen funds.
Binance claims that this was a classic pump-and-dump, or “rug pull” scheme, and feels somewhat involved because it developed the blockchain used by the DEX PancakeSwap, namely Binance Smart Chain, on which the token was issued and traded.
The fact is that anyone can create a token on Binance Smart Chain and list it on PancakeSwap, so the risk of finding tokens created with criminal intent on DEXs is by no means non-existent.
On the contrary, according to a Binance spokesperson, these types of scam projects have become all too common in the DeFi industry.
However, the exchange also reported that it is aware of some of the addresses used by the SQUID developers, and is carrying out analysis on the blockchain to try to identify them. These addresses have been blocked on Binance and blacklisted.
Squid Game’s anonymous developers
The token’s developers appear to have used a mixer called Tornado Cash to hide their operations, but according to a Binance spokesperson, their team is tracking the movements of those funds.
The exchange expects to hand over the results of its analysis shortly to law enforcement in the jurisdiction where the fraudsters reside, but it appears that the real chances of recovering the funds are very slim indeed.
The developers of the SQUID token have always managed to remain anonymous, and even from their Twitter account and website, it seems they cannot be traced. Tracking them down could be quite complicated, even if the movements of the tokens can be traced.
Scams in DeFi
According to CipherTrace, more than $680 million was lost on crypto markets in the first seven months of 2021 as a result of theft, hacks and other illicit activities. 76% of these losses occurred on DeFi platforms.
Despite this, the overall TVL of DeFi’s platforms continues to grow, this includes on PancakeSwap where it has increased by 12% in the last seven days.
At this time, the SQUID token is not entirely dead, even though the development of the project is now completely abandoned. Compared to the peaks reached in recent days, its value is irrelevant now.