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A Netflix show became the basis of one of the biggest cryptocurrency scams of 2021, resulting in $3.3 million stolen from investors.
When Squid Game became Netflix’s most watched series in September 2021, scammers quickly created the Squid Game Token (SQUID), using the show’s popularity to lure unsuspecting investors.
Within just three months, they orchestrated the complete theft of user funds through a carefully planned “carpet-pulling” scheme.
The fraud occurred between October 20 and November 1, 2021, following a pattern that mixed social psychology with technical fraud.
Starting with promises of a play-earn game based on the theme of the show, the price of the token rose from pennies to $2,860 before dropping to zero within minutes. Fraudsters have disappeared with millions, leaving investors unable to withdraw their funds and authorities on the trail of the perpetrators.
Scammers have made the perfect squid trap
According to a detailed investigation by crypto analyst Roger Wang, the scammers timed their scheme perfectly. A month after the release of Squid Game, they launched their token with the promises of a game for money where players can earn cryptocurrency by competing in games inspired by the series.
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The timing took advantage of the public’s greatest interest, when the series dominated conversations on social networks around the world.
Wang explains how the scammers created artificial demand through a multi-step process. They first promised that token holders could participate in an online gaming platform that mirrored the show’s competitions.
Players would supposedly earn more tokens through the game, which they could then exchange for real money. The price responded dramatically to these promises, rising 1000% in the first week.
Media coverage increased the reach of the scheme. Headlines about the token’s price increase attracted more investors, creating what Wang calls a “self-fulfilling hype cycle.” Social media was buzzing with predictions that SQUID would hit $1.00, driving more buyers into what would become a trap.
Scammers created the perfect conditions: a popular theme, seemingly legitimate game plans, and rapidly rising prices that made early investors look successful.
Red flags and manipulation tactics
Roger Wang points out several warning signs that many investors missed during the height of SQUID’s popularity. First, the project had no connection to Netflix or the show’s creators, although its marketing materials implied an official relationship.
The project’s website contained basic grammatical errors, which Wang notes are usually indicative of a hastily made hoax.
The clearest red flag came in the mechanics of the token: investors could buy SQUID but couldn’t sell it. Wang explains how the scammers created an elaborate excuse for this restriction through a system they called “skulls”.
In order to cash out their SQUID tokens, investors had to buy additional tokens called marbles. This requirement forced investors to put more money into the system, even though they could not withdraw their initial investments.
Psychological manipulation became more and more complex over time. When critics began calling SQUID a Ponzi scheme, the creators defended their marble system as a game feature, playing on the Squid Game theme.
Wang describes how this response actually worked in the scammers’ favor—it made the restriction look legitimate and game-like, rather than suspicious. Even after buying the marbles, investors were still unable to access their funds, trapping them in an endless cycle of purchases.
Collapse and lessons learned
The scam peaked on November 1, 2021, when the SQUID token price reached $2,860. Wang describes how this moment marked the exit of the fraudsters – within minutes, they deleted all their social media accounts, shut down their website and disappeared with $3.3 million in investor funds.
The price of the token dropped to zero, leaving investors with worthless stakes and no way to get their money back.
Wang explains why this scam worked so effectively. Creators capitalized on the fear of missing out (FOMO) by tying their token to one of the most popular shows in Netflix history.
They built artificial urgency by driving up prices, causing potential investors to worry they might miss out on life-changing returns. The fraudsters remained anonymous throughout, making it impossible for the authorities to track them down after the rug was pulled.
The lessons from this scam extend beyond crypto trading, Wang explains. First, cultural excitement can override basic due diligence – investors ignored clear warning signs because they wanted to believe the project’s connection to Squid Game.
Second, a limited sales opportunity should always raise alarm, regardless of the explanation given. Third, anonymous teams promoting investment opportunities deserve additional attention.
