Squid Game Token: The Token You Literally Could Not Sell

On the morning of 1 November 2021, a coin called SQUID was trading at $2,861. A week earlier it had cost about a cent. Within minutes it was worth less than a cent again, its website was gone, its social media accounts had vanished, and the anonymous people behind it had left with an estimated $3.38 million of buyers' money.

SQUID borrowed its name from Squid Game, the Korean survival drama that had become the most watched series in Netflix's history that autumn. The token had nothing to do with Netflix or the show. It claimed to be the currency for an online game, "play to earn", in which players would win tokens for taking part. The game never appeared. What did appear was a trap that most buyers had no way of spotting.

A share you could buy but never sell

SQUID went on sale on 20 October 2021 and started trading on 26 October. It lived on what was then called Binance Smart Chain (now BNB Chain), a blockchain run alongside Binance, the world's largest crypto exchange. A blockchain is a shared public ledger that records who owns what. Creating a new token on this one cost a few dollars and needed no one's permission, a little like being able to print share certificates for a company that does not exist and list them for trading the same afternoon.

The token was governed by a smart contract: a piece of code that moves money by itself, following its own rules, with no company or clerk in the middle. SQUID's rules contained what its creators called an "anti-dumping mechanism". Anyone could buy. To sell, a holder needed a second token, called Marbles, which could only be earned by playing the game. Since the game did not exist, nobody outside the team could sell. Analysts who read the code later pointed out that it took little more than an extra line in the transfer rule to block every sale except those from the address that controlled the contract.

The effect was a stock where the buy button works and the sell button is wired to nothing. Every purchase pushed the price up, because no sellers ever arrived to push it down. That is how the chart produced a rise of tens of thousands of percent in a week, and why it looked like a rocket rather than a warning.

How the money left

SQUID traded on PancakeSwap, a decentralised exchange: a trading venue with no company in charge, where prices are set by a liquidity pool. That pool is a pot holding the token on one side and real money on the other (here BNB, the coin of Binance's chain). Buyers add money and take tokens out. It works like the cash float in a shop till: as long as money sits in it, people can be paid.

On 1 November, the developers emptied the till. Removing the BNB from the pool, the move crypto calls a rug pull, left SQUID with nothing to be sold for. The price fell from $2,861 to fractions of a cent within minutes. Gizmodo, which first reported the scale of it, estimated the creators took about $3.38 million; other outlets reported figures between $2 million and $3.4 million depending on when the BNB was valued.

Binance said it was investigating and that the developers appeared to have used Tornado Cash, a so-called mixer that pools many users' coins and pays them out again so the trail from sender to receiver is broken, much like passing money through a crowded laundromat. Tracing by the analytics team at ForkLog found more than 22,700 BNB sent through Tornado Cash in 227 transactions from addresses linked to the project.

The red flags in plain sight

The warnings were there before the crash. On 29 October, three days before it, CoinMarketCap, the most used crypto price site, put a notice on SQUID's page saying it had "received multiple reports" that users could not sell. The website was full of errors and an online fraud checker rated it suspicious. Traders pointed out that the project's Telegram group (the messaging channel where crypto projects talk to holders) was closed to members' posts, comments on its Twitter posts were blocked, and its founders had no public profiles. Yet mainstream outlets, including the BBC and Business Insider, wrote up the token's rise as a fun story about a hit show and a soaring coin. Gizmodo later criticised that coverage for not pointing out that investors could not get their money out.

Much of the money came from ordinary buyers who saw the headlines, opened an app and bought in. Some told reporters they had lost everything they put in. Crypto now calls a coin like this a "honeypot": a token designed so that buyers can enter but never leave.

The story did not end with SQUID. When Netflix released Squid Game's second season on 26 December 2024, new tokens using the name appeared within days on Solana and Base, two other blockchains. On 27 December the security firm PeckShield warned that several were fraudulent; on one, the creator was also the largest holder and the price had fallen 99% since launch.