‘Squid Game’ season 2 launch inspires fresh cryptocurrency scams

User Nroj90 wrote on X: " Watch out with buying $SQUID from @Squid_Games_Sol. Yes, these are the top holders. Yes, they look all the same. No, that is not a coincidence."

They also shared an image of 11 wallet addresses holding significant amounts of Squid tokens from the SquidGamesSolana project.

They suggested that similar transaction patterns among these wallets indicate a concentration of tokens in the hands of a few individuals—or possibly a single entity—raising concerns that a mass sell-off could crash its value after attracting investors.

In the cryptocurrency world, such schemes are referred to as "rug pulls," where developers abruptly abandon a project and flee with investors’ money. Though this scam has existed for years, it remains prevalent, especially in decentralized finance projects.

Following the Dec. 26 release of "Squid Game" Season 2, blockchain tracker DexScreener recorded around 50 Squid Game-related tokens in circulation, with trading volumes ranging from a few hundred US dollars to nearly $7 million.

Most of these tokens were created in December, though some date back to 2021, when the first season was released. Many tokens surged in value briefly but then lost 50-80% of their value shortly afterward. Five lost more than 95% of their value, including one on the Base blockchain that dropped by 99% within just three hours.

On Dec. 28 blockchain security firm PeckShield issued a warning about scam "Squid Game" tokens circulating widely, advising investors to avoid trading them to prevent financial loss.

In 2021 Bernard, a crypto investor from Shanghai, lost $28,000 of his savings to a Squid token investment, according to CNBC.

Another victim, speaking to CoinTelegraph, said they had invested "a few hundred dollars" and watched the token’s value skyrocket by over 45,000%, only to find themselves unable to sell due to a lack of liquidity and unable to withdraw the funds they had invested.

Cryptocurrency is often branded the "Wild West" in reference to its unregulated nature that allows fraudulent schemes like rug pulls to persist.

According to Kim Grauer, head of research at Chainalysis, the ease of creating new tokens on blockchain platforms and listing them on decentralized exchanges creates opportunities for exploitation.

Eva Crouwel, head of financial crime at cryptocurrency exchange Luno, advised caution with projects that lack transparency, have unclear development teams, poorly designed websites, or lack detailed white papers and road maps.

"Start by doing as much due diligence as possible," Crouwel told CoinTelegraph.

"Look at the company’s/token’s social media profiles to see what other users’ experiences have been. You should also go through the company directors’ personal social media pages and look into their industry connections and employment background to ensure their history is sound."

Crouwel also warned against investing large sums and recommended preparing for the possibility of total loss in case of unforeseen incidents.