What is a rug pull? Squid Game crypto scam reveals danger

One of many hottest cryptocurrencies within the final week was a meme coin often called SQUID. It was based mostly on the favored Squid Game Netflix collection. It soared over 300% since its introduction final week from lower than one cent to an all-time excessive of $2,856 per coin. After which within the final 24 hours, SQUID crashed and its creators vanished.

Vice reports that the SQUID coin seems to have been what’s often called a “rug pull” in cryptocurrency circles, noting that “the builders apparently deserted the mission and offered their tokens, making off with an estimated $3.3 million. In a single day, all social media accounts related to the supposed recreation and its web site disappeared.”

However simply what is a rug pull? Right here’s how CoinMarketCap describes it: “A rug pull is a kind of scam the place builders abandon a mission and take their buyers’ cash.” However as Vice notes, the developer crew behind SQUID posted on their Telegram channel on Monday that their motive for getting out of the coin was that it was being hacked and thus they did “not need to proceed working the mission as we’re depressed from the scammers.”

As of the time of this writing, SQUID is now value lower than $0.003 per coin, according to CoinMarketCap, which now has a warning on SQUID’s itemizing web page stating, “We’ve got acquired a number of experiences that the web site and socials are now not practical & customers should not capable of promote this token in Pancakeswap. There is rising proof that this mission has rugged. Please do your individual due diligence and train excessive warning. This mission, whereas clearly impressed by the Netflix present of the identical identify, is NOT affiliated with the official IP.”

So what’s the takeaway right here? Sure cryptocurrencies might be professional, although unstable, investments. Nevertheless, it’s best to all the time be cautious of meme cash that pop up in a single day. Simply because a meme coin skyrockets tons of of p.c in a few days doesn’t imply it should proceed to take action and turn out to be the following bitcoin. For those who get in on the mistaken time, you would lose your entire funding.