How did the creators of SQUID tokens manage to sell digital coins to more than 40 thousand users, and how to avoid becoming a victim of a crypto scam in the future? Read our tips in the new LATOKEN review!
The Squid Game (SQUID) project — another crypto scam?
So what happened? This week, the Squid Game (SQUID) project, created based on the Netflix series of the same name, gained great popularity among crypto investors. The project developers promised to launch an online tournament in November, which was supposed to consist of 6 rounds, similar to the games in the TV series.
It was assumed that Squid Game (SQUID) tokens would need to be paid to participate in the tournament. At the end of the tournament, the funds were to be distributed between the developers and the winner in proportions of 10% and 90%, respectively.
On October 29, 2021, the SQUID token rose in price by more than 3380%, despite a warning in the project’s white paper that tokens could not be sold. After the Squid Game website and social media became unavailable, the value of SQUID tokens fell to $0.008 (a decrease of 99.9%). Nevertheless, about 40,000 users managed to acquire these tokens.
Despite reports that the Squid Game project turned out to be a crypto scam, the price of SQUID tokens began to rise again.
LATOKEN has written more than once about how not to become a victim of a cryptocurrency scam, and now we want to explain how to avoid such crypto scam projects in the future and why many crypto traders have invested in the Squid Game project.
There were several reasons — don’t become a victim of a crypto scam
The SQUID token was obviously a crypto scam project, so the fact that many people lost their money may surprise traders and crypto enthusiasts. However, cryptocurrency scams are thriving even though there are many ways and tips to avoid becoming a victim. We can name several reasons why the project turned out to be popular among crypto investors:
- “Hype” around the Netflix series “Squid Game,” which was used by the creators of the project;
- Some investors still see cryptocurrencies as just a tool for making money out of thin air. Thus, we can say that they still do not delve into the technical characteristics of the token, their application field, and the intrinsic value due to which the price is increasing. We want to remind you again that before buying this or that token, you need, at least, to do your own research;
- Influence of “meme” cryptos like Dogecoin and Shiba Inu. Their price might go up and down in a matter of hours, bringing enormous profits to their holders.
Likely, the rise in the price of the SQUID token was not organic. The project creators could artificially increase the price of their tokens using the “Pump & Dump” scheme. Dummy market participants manipulated the token rate. This combined with the general hype around the show and had such an overwhelming effect. However, if you have read our LATOKEN reviews, you should understand and realize that when you are dealing with cryptocurrency, you cannot be sure of anything.
These ups and downs in the price of low-liquid assets can be a result of using the “Pump & Dump” scheme. It is, unfortunately, widespread in the blockchain industry due to a lack of regulation.
Traders and crypto enthusiasts most likely saw a rise in the token price and rushed to buy a new coin, hoping for a quick profit.
The crypto market is built on reputation
We want to remind you that before investing in any cryptocurrency project, you must carefully study it and assess the prospects in the market. The fact is that even projects whose founders did not want to deceive anyone but planned to create a useful product may not survive on the crypto market.
In the case of SQUID, traders most likely did not check the project team at all. Who launched it, who created it? The information about the creators of the project was not available from the very beginning. So be wary of crypto projects that have become very popular on the cryptocurrency market just in a few days.
The project’s website stopped working as well as social networks. What is more, Netflix said that it had nothing to do with them. The cryptocurrency market is based on reputation, and the SQUID team did not have any reputation. It was almost evident that traders were faced with another cryptocurrency scam.
To protect your funds from investments in scam projects and not become a victim of a crypto scam, you should not make decisions based on your emotions and because you like a dog or another animal, or the TV series, after which the project was named.
If you follow these pieces of advice from LATOKEN, you are unlikely to become a victim of a crypto scam, and you will be able to work with cryptocurrency safely.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.