Squid Game – The Most Shocking Rug Pull in History. What Exactly Is a Rug Pull?

The Squid Game Rug Pull Incident – A Historical Lesson

Squid Game was a play-to-earn game project inspired by the hit South Korean TV series of the same name. SQUID served as the project’s native token, with a total supply of 800 million, built on the Binance Smart Chain.

The SQUID token was listed and traded on two decentralized exchanges: PancakeSwap and DODO BSC. Launched at the end of October 2021, it quickly became one of the most notorious rug pulls in the history of the cryptocurrency market.

Timeline of Events:

On November 1, 2021, SQUID’s price experienced extreme volatility, skyrocketing from $38.32 to $2,856.54 within a short span, fueling a frenzied wave of investment. However, just an hour later, the SQUID price crashed catastrophically to $0.0007926, wiping out thousands of investors.

This collapse wasn’t accidental. Investors had already detected several warning signs:

• The project’s website was created only three weeks prior and was riddled with severe grammatical and spelling mistakes
• The project’s Telegram channel prevented members from commenting or asking questions
• The official Twitter account disabled community comments
• Most critically, investors could buy SQUID tokens on PancakeSwap but were completely unable to sell them

The Squid Game incident stands as a costly lesson about rug pulls, underscoring the importance of thorough due diligence before investing in crypto projects.

What Is a Rug Pull?

A rug pull is a common type of scam in the cryptocurrency industry. It occurs when project developers abruptly abandon the project and seize all invested funds.

The term “rug pull” is derived from the English expression “pull the rug out from under someone.”

FAQ

What is a rug pull? Why is it considered the most serious scam in cryptocurrency?

A rug pull is when project developers walk away and withdraw all funds, causing the token’s price to collapse almost instantly. It’s considered the most severe scam due to its rapid, devastating impact on investors, combined with the technical complexity and anonymity inherent in the crypto space.

How did the Squid Game coin rug pull occur? How did the founders execute the scam?

The founders of the Squid Game coin carried out their rug pull by siphoning nearly $3.4 million from investors, then disappearing and abandoning the project. This was a textbook crypto scam that inflicted major losses on investors.

How is a rug pull different from other crypto scams (like Ponzi schemes or fake projects)?

A rug pull happens when the project team drains all liquidity and vanishes, rendering the token worthless. Ponzi schemes use fake returns to pay earlier investors. Pump and dump operations artificially inflate token prices through misleading hype, then dump their holdings. Each strategy uses a different scam mechanism.

How can investors identify potential rug pull risks? What warning signs should they check?

Look for anonymous teams, unaudited smart contracts, unrealistic promises, and limited liquidity. Use specialized tools to analyze liquidity pools and verify whether LP tokens are locked. Always conduct thorough due diligence before investing in any project.

In the Squid Game rug pull, how much did victims lose? Is there any way for them to recover funds?

Victims lost at least $3.4 million. The chances of recovering any of the funds are extremely low, since the anonymous founders made off with all the money in a sudden move.

After the Squid Game rug pull, what changes were made in crypto oversight and investor protection?

Oversight in the crypto market has increased, and investor protection measures have been strengthened. Governments and regulatory agencies have introduced stricter compliance requirements and enhanced transparency, along with more comprehensive complaint channels and protections for investors.

How can you avoid falling for a rug pull? What should you pay attention to when choosing a crypto project?

Assess the transparency of the team, verify the smart contract code, check that liquidity is locked, and avoid projects that promise excessively high returns. Prioritize projects with clear histories, active communities, and development teams that regularly answer questions.