The value of a cryptocurrency inspired by the popular Netflix series Squid Game collapsed on Monday less than two weeks after investors could start buying tokens.
After jumping more than 310,000% in value as of Sunday night, Squid lost all its value after Twitter flagged the cryptocurrency’s account and temporarily restricted it due to “suspicious activity”.
Right before its collapse, the token’s value had spiked to $2,856. The token’s website and social accounts have disappeared, along with a white paper describing Squid.
The token was made available for purchase on 20 October with the idea that the cryptocurrency would be a pay-to-play token to play an online game, inspired by Squid Game, the hit series in which heavily indebted people play deadly versions of children’s games to win cash.
The game was set to launch in November and its promoters said winners would be rewarded with more Squid tokens. But even as the cryptocurrency’s price spiked in value last week, many noted that the token could be fraudulent.
Investors were having trouble selling their tokens and the cryptocurrency’s white paper was laden with grammatical errors, according to multiple reports.
The creators of the cryptocurrency could have made off with as much as $2.1m after the token’s crash, according to Gizmodo.
CoinMarketCap, a cryptocurrency price-tracking website, warned potential buyers before the crash of the cryptocurrency’s possibly fraudulent nature, telling investors to “please do your own due diligence and exercise caution while trading” and warning them that investors were having trouble selling their tokens.
An anonymous Squid investor told CoinMarketCap, “I lost all of what I had in this project” after investing $5,000 into the cryptocurrency.
Experts have warned investors to be careful when considering purchasing “meme” cryptocurrencies based on cultural phenomena, even if it appears the currency is doing well on the market.
“Remarkably, many such coins rapidly catch investors’ fancy, leading to wildly inflated valuations,” Cornell University economist Eswar Prasad told the BBC. “Naïve retail investors who get caught up in such speculative frenzies face the risk of substantial losses.”