Squid Game Crypto Scam: A Classic Example of Fraudulence
The crypto coin “Squid” was launched fairly recently and right from its onset, had several red flags! Based on, but not affiliated to, the popular Netflix show Squid Game, the meme coin reached a staggering $2,861 before crashing to $0 on November 1. The scamsters have made an estimated $3.38 million with the Squid coin scam.
This type of theft is commonly known as a “rug pull” by crypto investors and refers to the creators of the crypto quickly cashing out their coins for real money, thus draining the liquidity pool from the exchange. In the case of the Squid coin, there were already a lot of warning signs including a three-week-old website full of obvious spelling and grammar errors.
Moreover, Squid’s Telegram channel (which was set up by the alleged scammers) also didn’t allow comments from outsiders. Soon after the coin crash, the website created for the coin vanished along with its social media presence set up by the scammers. Not just that! People who purchased this coin were not even able to sell it, to begin with.
However, this did not stop the famous media channels such as BBC, Yahoo News, Business Insider, and CNBC from running headlines about Squid soaring 83,000% just within a few days. In this article we share what we learned from the squid game crypto scam and how you can avoid such scams in the future. Let’s get right into it!
Should You Trust Cryptocurrency?
Could the recent Squid coin scam finally mean that investors have learned not to invest in shady cryptocurrencies anymore? Well, only time can tell that. There is a reason why the traditional currency has largely been relied upon and reasonably so! But it certainly does not mean that you cannot make money trading crypto.
With a new meme coin coming up every day, it becomes rather confusing to distinguish a legitimate crypto project from a scam. If you are planning on buying cryptocurrency, it is crucial to watch out for various factors besides just the price. But what are the things that you really need to watch out for while navigating the world of cryptocurrencies? Let’s take a look.
Things to be Mindful of Before Choosing a Cryptocurrency to Invest in
With so many coins out there and many of them being potential scams, here’s how you can pick a crypto coin that is genuine.
Run a Thorough Background Check
Cryptocurrencies such as Bitcoin and Ethereum have stood the test of time and have been around for a decade. Not only that, but their founders are also working continuously to make them better. However, such is not the case with every cryptocurrency. For instance, although Dogecoin gained a lot of popularity, its creators abandoned it years ago! Therefore, it is very important to learn the history of any cryptocurrency as well as its sustainability.
• Trends Can be Tricky
Hundreds of new crypto coins enter the market every single day. Since the cryptocurrency market is still unregulated, anyone with internet access can make their own cryptocurrency. Most of these coins will be based on pop culture and social media trends. While it can be very tempting to get on the bandwagon and buy the coin, the risk of the coin dying as soon as the trend settles is also high. Most of the time, the creators will not be serious about the coin and so you should avoid any currency that pops out of nowhere!
• Go Through Their Official Website
A major red flag in most of the newly created cryptocurrencies is their website. A fake coin will most likely have a website full of errors and a website that is freshly created. If you can spot basic grammar errors then it’s best to stay away from such coins let alone invest in them. Likewise, you can check the social media platforms of the coin and the frequency of posts as well as the responsiveness. If the coin is fake then the social media account will not be very functional.
• Question Every Communication
A very common way in which scammers approach you will be fishy emails and WhatsApp messages. If you are an investor who shows even the slightest interest in crypto on the internet, then scamsters will reach out to you and add you on WhatsApp or Telegram groups and even spam you on emails. The majority of these groups promise easy investment, as well as great returns, but none of them are reliable. Make sure you invest in reliable and established platforms only.
• Look for a Sustainable Coin
If you are looking at crypto as a way to exponentially grow your money overnight then you need to think twice! Look for sustainable growth which can only be achieved through long-term options like Bitcoin, Ripple, Ethereum, etc. Some altcoins and meme coins are often pumped by social media posts as well as tweets but they have a higher risk of crashing.
• Don’t Give in to The Fear of Missing Out
If you are investing in something just because of fear of missing out (FOMO) then it is a sure way of destroying the wealth you may have accumulated over the years. When it comes to cryptocurrencies, going by what everyone else is saying is not a wise option. You really must do thorough research and if you are satisfied with the history and prospects of the coin then you can invest in it. Having said that, every coin has pumpers (who promote the coins regardless of their legitimacy), including bitcoin. It’s best not to succumb to any peer pressure and invest only based on statistics and merits.
• Don’t Fall for “Unit Bias”
Just because a coin trades around $1 does not mean that it is cheaper than bitcoin at $64,683. Each coin is different and has varying levels of decentralization as well as developer support. If you wish to determine the value of a coin then you should ask the right questions such as when and why the coin was created? What is its utility? Who is working on it? How active is the repository on GitHub and where are the updates to open-source software usually logged? Likewise, you should also find out about the security model of the coin as well as proof-of-stake and proof-of-work, etc. With these questions, you can identify on a high level if the coin is worth investing in.
The Squid coin scam has been an eye-opener for many and you can save yourself from such scams with the tips mentioned above. Making money through cryptocurrency is possible and you simply need to be more careful and vigilant when it comes to choosing the right coin. With time you will soon be able to identify scamsters who even impersonate legitimate companies just to get a hold of your coins.
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