Monday, December 6, 2021

Anonymous Developers: The ‘Squid Game’ Crypto Scam (Oct 2021-Nov 2021)

Anonymous Developers: The ‘Squid Game’ Crypto Scam (Oct 2021-Nov 2021) 

This photo shows an accurate candle stick chart including the rug pull

that took place to bring the value of the coin nearly to $0. 


For ages, people have been fascinated with the idea of being able to get rich quick-- the ability to do little to no work and make a steady income is many individuals' dream. In the past year, this dream has become a reality for many people. sometimes just with the click of a button. Cryptocurrency has been among top headlines in the news for quite some time after Bitcoin’s price per coin shot to the moon, making investors multi-millionaires. In response to the spotlight being pointed at all cryptocurrencies as being a way to ‘get rich quick’, other types of cryptos started appearing out of thin air. However, many of these virtual currencies are created by anonymous developers and turn out to be scams which lose investors thousands of dollars. In this crypto craze, rose what was called ‘Squid Game Token’. These witty crypto creators made a coin that was advertised as a video game currency that could be used to multiply your investment if you compete in the online games and win. After a new show releasing on netflix and quickly gaining popularity this crypto currency didn't need much advertisement to gain traction. Only 2 weeks after this coin was released to the public the price increased from below a cent to over $2,000. This was a shock to many investors as they had multiplied their investment by an insane amount of money. When these investors went to sell their coins for their profit, they were unable to transfer the funds to actually collect their profit. The squid games team took their social media offline and weren't answering concerns of investors, basically leaving them out to dry. The initial website was taken down leaving no trace of the scam available to be reviewed. This is a very important issue to be reviewed as cryptocurrency investing is on the rise. It is important to investigate before you invest and make sure your funds are secure before becoming involved in some risky investment. 

This is the timeline of the case including important events that took place before during and after the controversy.

Case Controversy

The Squid Game Cryptocurrency was created by developers in late October after the Korean TV drama ‘Squid Game’ became the top show on Netflix in over 90 countries. The developers of the token took advantage of the hype behind the popular show and saw potential for profit. When the show was at its peak, the developers built a community behind the investor’s hopes of the “next big cryptocurrency that will make you rich”. Since the show was so popular, many retail investors thought that there was no potential for loss-- but they were very wrong.

Developers started their malicious plan by building onto the hype created by the drama series. The token was promoted on social media platforms such as Instagram, Twitter, and Reddit. As recognition quickly grew, devs created a website called “”,  and formed a Twitter account with more than 57,000 followers and a Telegram channel with over 71,000 subscribers. Whilst gaining this social capital, the developers of the Squid Game cryptocurrency released the pre-sale of the token “on decentralized exchanges ‘PancakeSwap and DODO, both which are based on Binance Smart Chain” at just over a penny on October 20th, 2021. (Chen, CoinDesk).

The cryptocurrency quickly soared to $40+ (+4,000%) on October 23rd; just 3 days after presale was listed for the token. At this point, news outlets and social media platforms were releasing stories about the new crypto growth. However, it wasn’t all good press… Professional traders and business news outlets released multiple reports stating that there is a high probability the Squid Game Coin was a scam:


Gizmodo pointed out numerous signs it was a scam, including its (now disappeared) website being filled with spelling errors. Another red flag: Investors could buy -- but not sell -- SQUID. CoinMarketCap also warned potential investors that SQUID was probably a scam, displaying a warning to "exercise extreme caution" if they bought the crypto. (Valinsky, CNN Business)


The biggest red flags of this case were the inability to sell, and the constant broken English on the website and Twitter/Telegram accounts. You may ask, why would you buy an imaginary currency that you can’t sell? Well, the developers claimed that when they were designing the token, they decided to “limit people from selling the token as an ‘anti-dumping’ measure”, to prevent big shareholders from pumping up the value of the coin by buying lots of coins, and then selling off, tanking the value (Shumba, Markets Insider). This was a massive problem that investors didn’t seem to care about. The only thing on their mind was the fear of missing out on the next big money-maker.

         Although several reliable outlets claimed the Squid Game crypto was an ‘obvious scam’, the volatile prices continued to soar. By the morning of November 1st, “as the crypto peaked at more than $2800, the anonymous creators of the company decided to cash in. They sold off their holdings, shut the project’s website down, and made off with millions.” (Binder, Mashable). With the crypto market value reaching $2800, that means over a ‘23 million percent growth’ according to Cheng from Washington Post. When the developers cashed in their tokens, it made the market value fall far below a penny ($0.0008) since they owned the vast majority of Squid Game tokens in the market. Shortly after running with $2.2-$3.3 million, “[the developers] tried to divert blame elsewhere:

‘Sorry again for any inconvenience been made for you,’ the message read. ‘If any strange starts coming out of it, ignore it. Thanks!’” (Cheng, Washington Post).

This was the last post to the Telegram channel and all social media before the platforms and website were deleted. This situation left investors confused and drained of funds as the token was rendered worthless.

         The scam used by the Squid Game developers is called a ‘rug-pull’ scam. A rug pull scam in cryptocurrency is when “a token’s creators abandon the project by exchanging many virtual coins for real-world cash”. (Cheng, The Washington Post). This maneuver quickly drives the market value of the cryptocurrency to zero and leaves investors with worthless virtual coins. Although other tokens have scammed investors through a rug-pull scam such as ‘SaveTheChildren’ and ‘SafeTrade’, SQUID “fell by more than 100% in the space of just 5 minutes, dropping from $2856 to $0.0008.”, making it the biggest rug-pull in cryptocurrency history. (Layram, Bankless Times). 

Squid games' popularity grew very fast giving investors a false sense of credibility about this crypto currency. Here are some people dressed as characters on Halloween showing they loved the show and wanted to support that. Having a huge marketing event like halloween and the actual show on Netflix that they didnt have to pay for made a huge impact on their profits. The creators of this coin used other peoples hard work to scam willing investors.


The stakeholders in the Squid Game cryptocurrency scam includes the developers, the news outlets and social media outlets that promoted the coin, the investors, and all people interested in learning to invest in cryptocurrency. The anonymous developers saw an unethical business opportunity in the Squid Games popularity and took advantage of investors. The developers were the mastermind behind the rug-pull and managed to get the market value per coin high enough that the news and social media increased recognition and social capita which encouraged inexperienced, desperate investors to cave in. The news outlets and social media accounts that promoted the coin may or may not have known the risks involved and all the red flags that were shown, but they increased the popularity of the coin. Investors lost hundreds and some even thousands because of the scam. If they bought SQUID for $0.01 during pre-sale on October 23rd, they still would have lost money. The investors were directly affected by the scam. In addition, I’d say that people wanting to learn how to invest in crypto are stakeholders. After hearing of massive scams on a cryptocurrency that sounded interesting and was promoted on news, the new investors may get scared of the risks and run for the hills.


An individualist view emphasizes the moral worth of an individual. Individualists promote the actions of one’s goals and the value of independence. They make the individual the primary focus starting with focusing on the needs and wants of that person. It promotes the belief that the individual is responsible for their own need and shouldn’t rely on anything or anyone else. When applying individualism to business rather than just self-interest and an individual in society, the main goal is for the business to profit. The obligation is to maximize profit following the law. Something or someone who supports individualism would consider being better than others for personal benefit. If a business had an individualist view, they would encourage employees to outperform their coworkers to better secure the personal benefits. In the Squid Game scam individualists would say that the creators had personal benefit. Due to the fact that it was fraud it wasn’t necessarily by the law within itself. Investors unfortunately in this situation are at a loss regardless because they were scammed. Unintentionally, they ultimately benefited the creators. As the media publishes more and more news articles, there are realizations coming out that there was clear evidence of this scam coming from the start.  This deception was part of personal gain. It was working to create ways to persuade people into purchasing tokens that were based off a brand-new hit Netflix series. Individualists would view this as morally and lawfully not the best way to achieve self-interest. Although it does have a personal gain for the individual which in this case would be the creators of squid games, morally, fraud is unethical. Fraud in the view of individualism is impermissible. If the creators of squid games took the 10% they had released in the rules of the games after the 90% went to the winner, that would be permissible in the ethical theory. Individualists believe that what is morally required would be using ethical and lawful ways to succeed and achieve personal gain. As Milton Freidman viewed, “the only obligation the business person has is to maximize profit for the owner or the stockholders within the law of the land.” (Salazar 10) 


A utilitarian would view the actions taken by the developers of Squid Game as immoral because society as a whole was negatively impacted, thus creating unhappiness for all except the developers. According to the theory of morality by utilitarianism, society should advocate actions that promote happiness and pleasure in everyone. Other actions taken that do not produce such results are considered immoral, and thus the developer's actions to create such a game to take 2 million dollars away from both the investors and the players goes against the theory of utilitarianism. However, the actions taken by the treasury department to urge Congress to create rules to regulate cryptocurrency such as stable coin seems like an action a utilitarian would take because society as a whole would feel much safer about investing in cryptocurrency since these laws would somehow prevent fraudulent acts when passed.


The Kantian ethical theory is an example of a deontological moral theory. The rightness or wrongness of actions doesn’t depend on their consequences but whether they fulfill their duty. Kant believed that there was a supreme principle of morality, and he referred to it as the categorical imperative. The biggest difference between Kantian and utilitarian views on the issue is looking at the consequences. “Kantianism does not make decisions based on consequences,” (Salazar 21). The categorical imperative determines what our moral duties are. The way you can judge if Kantian’s idea of ethics would agree with a certain action is asking yourself if everyone in society did this would it be ok? Kantianism doesn’t look at the consequences, it looks at the will of the person behind the action.

“Kant tells us that we should act only according to those maxims that could be universally accepted and acted on,” (DesJardins 38) Coming off that there is no way that if every person created a scam cryptocurrency and manipulated the market as well as false advertise that we would have a functioning society. This would cause many issues with the economy as well as people’s economic situation. Kantian also believed that the action you take must be taken because it is the right action and agrees with moral correctness. This obviously didn’t qualify as moral due to the creators deceiving many investors to take all their money in the end.

All in all, Kant would not agree with the ethical decisions made by the squid token team. But who ever said criminals are going to abide by ethics, they don’t even want to abide by the law as it is? This is truly an interesting topic to observe using different ethical theories as each theory has a different way of approaching it. In this situation if the person in charge of this operation had the same ethical beliefs as Kant, it would be viewed as unethical, and they would have never created it in the first place. From the beginning they had to have bad intentions for this to be pulled off correctly the way they did it without getting caught.  

Virtue Theory

Virtue theory takes on a more character-based approach to knowing between right and wrong. This knowledge is learned mainly through life experience and stresses honesty, courage, self-control, temperance, fairness, and justice. Virtue theory is not based on just decision making, but character. Virtue theory is unique because it means being yourself and acting as the good virtues and moral character you have, over just doing it through analyzing and trying to have good virtues. In reference to the case, virtue theory is a great way to analyze the Squid Game scam because acting rationally and consistently doesn’t necessarily mean having good virtues. Virtue theory can be applied to all the stakeholders in the scam:

The Developers: The developers were risk-takers in chasing profits at the expense of scamming investors/supporters. Developers had no temperance, self-control, honesty, or fairness. They posed as the developers of a new and promising cryptocurrency that could be the next big money-maker for people who wanted to invest.

News Outlets and Social Media Pages: At the start of the Squid Game crypto’s expansion and massive growth, news outlets and social media pages were quick to cover the story and share it to the world. By doing this, they showed no temperance or self-control. The journalists may have thought that they were showing honesty and courage by spreading the information, but they didn’t research the history of the coin well enough and continued to spread information that encouraged people to invest. Some outlets such as Gizmodo used courage, honesty, and fairness/justice to spread helpful information, pointing out that the coin was a scam and help others.

Investors: All investors in the cryptocurrency were negatively affected by the scam. They failed to show self-control and temperance by investing money into a random cryptocurrency that they didn’t do enough research on. Ultimately, they were left with pennys and didn’t receive justice and fairness in their investment.

People Who Are Interested In Investing: The new investors or people who are trying to learn about investing in cryptocurrency could have had their trust and reliability in crypto broken after this scam. Situations like this can easily scare off the new investors after they see developers and companies break the honesty, courage, self-control, fairness, and justice that they are supposed to uphold.


The developers and marketing team of the cryptocurrency clearly are in the wrong and failed to show the virtues that make up a good person. The failure to show honesty and fairness to investors were clear indicators that the developers had bad virtues. Many sources had the courage to promote valid information in regards to the case whilst others had no self-control in spreading bad information. Ultimately, developers were at fault for the investor’s misfortune and got away with $2.2 - $3.3 million at the expense of their own character’s good virtues.


Action Plan 

The current issue being studied in this case is the self-serving acts of the squid game cryptocurrency developers in late October of 2021. The developers tricked investors into buying a worthless token without any history on the ‘company’. This issue can be prevented in the future through more cryptocurrency regulation and investors making more researched, safe financial decisions. Squid Game Cryptocurreny was created with a goal in mind for their investors and the creators themselves. It would create more transparency to investors by creating a mission statement of their platform. A mission statement would be very beneficial to let out the plans and goals for Squid Game Cryptocurrency. A suggestion would be that Squid Game Cryptocurrency has a mission statement that states they are trying to help people benefit in investing at a low price or selling high which helps them earn and profit off of their investments. Along with this mission statement, a company should have core values that are outlined for them to follow. The  main core values that are relevant to SQUID game developers should be Honesty; They should be honest to their customers and investors about the status of the company in order to maintain trust between them and the customers. Trust - they need to maintain an image of being trustworthy since investors would trust them to maintain, and return their money back if needed. Accountability -  Developers need to accept any responsibility for any mishap, while disclosing any results in a transparent way in order to maintain respect customers have for their company. Integrity - to customers the practice of honesty, consistency, and uncompromising adherence to strong moral and ethical principles. These core values developed have a lot to do with ethics and the correct morals. We can ensure ethical productivity and monitoring of ethics in the future to prevent this problem from occurring again by changing cryptocurrency policies and regulations to prevent fake coins from being sold and make it harder for the scammers to get away with investor’s money. With this mission and core values, the company will ensure that customers believe in the company’s morals and the goals of the company. The plan will maintain the connection between the company and the customer while ensuring the customers feel a sense of pleasure and happiness about the company.

Daniel Lupo, Zachary List, Malina LaCapra, Emmanuel Kwarteng


Ruby Layram·Blockchain·November 1, 2021·2 min read. “Is the Squid Game Crash the Biggest Pump and Dump in Crypto History?” Bankless Times, November 1, 2021. 

Cheng, Amy. “'Squid Game'-Inspired Cryptocurrency That Soared by 23 Million Percent Now Worthless after Apparent Scam.” The Washington Post. WP Company, November 2, 2021.

Binder, Matt. “'Squid Game' Cryptocurrency Turns out to Be a Scam, Creators Run off with Millions.” Mashable. Mashable, November 2, 2021.

Shumba, Camomile. “'Squid Game' Token Goes Offline after Skyrocketing 75,000% - and That Means the 'Scam' Is over, Coingecko Says.” Business Insider. Business Insider. Accessed November 12, 2021.

Valinsky, Jordan. “Squid Game Crypto Plunges to $0 after Scammers Steal Millions of Dollars from Investors.” CNN. Cable News Network, November 1, 2021.

Shen, Muyao. “Squid Game Token Crashes; Developers Say They've Left the Project.” CoinDesk Latest Headlines RSS. CoinDesk, November 1, 2021.

Benjamin, Patrick. “The Creators of a Squid Game Cryptocurrency Scam Have Made off with £2.5m.” Dazed, November 2, 2021.

“Squid Game Price Today, Squid to USD Live, Marketcap and Chart.” CoinMarketCap. Accessed November 12, 2021.


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