The Squid Game Token (SQUID) was a fraudulent BEP-20 token launched on the Binance Smart Chain in late October 2021, exploiting the global popularity of Netflix’s “Squid Game” series. Despite being entirely unaffiliated with Netflix and flagged by multiple analysts as a scam, the token’s price rose from a fraction of a cent to $2,856.65 in a matter of days — before the anonymous creators drained the liquidity pool in seconds, executing one of the most publicly visible rug pulls in crypto history. Investors lost approximately $3.38 million; the scammers were never identified.
The Setup
October 26, 2021: SQUID token launched during the peak of global Squid Game mania (the Netflix show had launched September 17, 2021 and instantly became the platform’s most-watched series).
The marketing claimed SQUID would be used in a “play-to-earn” game inspired by the show’s premise. A white paper (which contained plagiarized text) described plans for an actual online game where players would use SQUID to enter and compete for a prize pool. The project’s website and social accounts were quickly assembled.
The Anti-Dump Mechanism Trap
SQUID contained a critical trap in its smart contract: an anti-sell mechanism that prevented holders from selling their tokens. Only wallets that had also acquired a separate companion token (“Marbles”) could sell SQUID. Marbles were available only through winning exclusive games that hadn’t launched yet.
This meant:
- Buyers could buy freely
- Sellers could not sell without acquiring Marbles — nearly impossible in practice
This is a common rug pull mechanic. Early warning signs were visible to on-chain analysts but ignored by most buyers caught up in the hype.
The Price Explosion and Collapse
| Date | Price |
|---|---|
| Oct 26, 2021 | ~$0.01 |
| Oct 30, 2021 | ~$0.07 |
| Nov 1, 2021 | ~$33 |
| Nov 1, 2021 (peak) | $2,856.65 |
| Nov 1, 2021 (collapse) | $0.0007926 |
The spike attracted coverage from mainstream media outlets including BBC News, Business Insider, and CNBC — many reported the price surge without adequately flagging the obvious warning signs. This media amplification drove more retail purchases.
November 1, 2021, approximately 5:00 AM UTC: The creators executed the rug pull, draining the entire liquidity pool in a single transaction. The price crashed from $2,856 to essentially $0 in seconds. Coinmarketcap had added the token to its site and included a warning label, but the warning was widely ignored.
Stolen Amount and Aftermath
On-chain analysis revealed the creators stole approximately $3.38 million in Binance Coin (BNB). The Telegram group and website went offline immediately. Social media accounts disappeared.
No arrests were ever made. The anonymity of BSC deployment and the use of mixing protocols made fund recovery essentially impossible.
Lessons and Legacy
The Squid Game Token became a textbook case used in:
- Crypto security education: Referenced by exchanges, regulators, and researchers as an example of anti-sell contract mechanics
- Regulatory discussions: Cited in multiple congressional hearings on crypto consumer protection
- Media responsibility: CoinMarketCap added Squid Game Token to its list of highest-volume scams and updated its warning system
- DYOR culture: Reinforced the “Do Your Own Research” ethos — checking smart contract code, liquidity lock status, and sell restrictions before buying
Related Terms
Sources
- Chainalysis (2022). “The 2022 Crypto Crime Report: DeFi Rug Pulls.” Chainalysis Annual Report.
- Torres, C.F. et al. (2021). “Frontrunner Jones and the Raiders of the Dark Forest: An Empirical Study of Frontrunning on the Ethereum Blockchain.” USENIX Security 2021.
- Rug Doctor Project (2021). “SQUID Token Code Analysis.” Independent Blockchain Security Analysis, November 2021.
- BBC News (2021). “Squid Game Crypto Scam Collapses After $2.86m Heist.” BBC Technology, November 2, 2021.
- FTC (2022). “Cryptocurrency Scam Reports: 2021 Summary.” Federal Trade Commission Consumer Protection Report.