As of 11:30 a.m. ET, the value of the Squid Game coin had collapsed 99.99 percent to a paltry $0.026 per coin, down from $2,856.64 per coin at one point on Sunday, according to data from CoinMarketCap.
In a major red flag, the site issued a warning to investors that holders of the coin aren’t able to sell it on Pancakeswap, a popular decentralized exchange.
“We have received multiple reports that the website and socials are no longer functional & the users are not able to sell this token in Pancakeswap,” CoinMarketCap said.
“Please do your own due diligence and exercise extreme caution. This project, while clearly inspired by the Netflix show of the same name, is not affiliated with the official IP.”
The site had warned since the crypto began trading that at least some users were unable to sell it, but the developers of the project said that was by design as part of an “anti-dump mechanism.”
In another red flag tied to the crypto, the now-deleted white paper for the project included grammatical errors.
The collapse in value of the crypto came hours after Twitter flagged accounts associated with the crypto as suspicious and restricted access to them.
“Caution: This account is temporarily restricted,” Twitter warns users when they try to access any of the accounts associated with the crypto, which was purportedly meant to be used in a virtual game mimicking its namesake show.
Since Twitter began flagging the accounts, the developers of the crypto also deleted a white paper that was associated with it, as well as a website on which it was selling non-fungible tokens, or NFTs, also associated with the game.
It’s not clear exactly what happened to the crypto, but traders speculated on social media that it was a classic so-called rug-pull scam in which the developers of a crypto abandon the project and steal the funds invested in it.
According to CoinDesk, the developers behind the project said Monday on their official Telegram channel that they didn’t want to continue running the project due to the stress of dealing with hackers.
“Someone is trying to hack our project these days. Not only the twitter account @GoGoSquidGame but also our smart contract. We are trying to protect it but the price is still abnormal. Squid Game Dev does not want to continue running the project as we are depressed from the scammers and is overwhelmed with stress [sic]. We have to remove all the restrictions and the transaction rules of Squid Game. Squid Game will enter a new stage of community autonomy,” the project reportedly said.
Gizmodo reported that the developers likely made off with an estimated $2.1 million.
The rapid ascent and sudden collapse of the digital token underscores the risks associated with small-cap cryptocurrencies, which are still largely unregulated.
It’s also part of a recent trend in which developers tap into cultural sensations like popular TV shows to boost the recognition of their crypto projects, regardless of their legitimacy.