Following on from the meteoric rise and crash of the SQUID token over the last week, Binance has said that it is investigating the incident and is trying to trace the developers who have since abandoned the project.
No doubt in part due to the popularity of the Netflix Squid Game series, the SQUID token went on a parabolic price surge that saw it rocket from $0.01 to $3000 in just a few days.
The token then crashed to zero at an even quicker pace, as the developers pulled the rug on those who had invested. The website was taken down, and investors into the token have been left counting their losses.
It has to be admitted that crypto still has a way to go in order to clean up the industry and prevent scams like this from happening so easily.
It was therefore encouraging to see that Binance has entered the fray. The biggest exchange in crypto has let it be known that it is attempting to blacklist addresses tied to the scammers, and that also it will provide all information it finds to the authorities of all relevant jurisdictions.
A spokesperson for Binance said of the scam:
“These types of scam projects have become all too common in the DeFi space as speculative crypto investors seeking the next ‘moon shot’ are quick to invest in projects without doing the appropriate due diligence,”
It probably won’t be the last scam either, as investors will likely continue to bet on these kinds of crypto start-ups. There will be the odd few that trick investors out of their money, but getting on the right projects early has been shown to return some spectacular gains on occasions.
Binance is going to have its work cut out given that the scammers are said to have also covered their tracks by using Tornado Cash.
CZ, the CEO of Binance urged investors to become more knowledgeable about cryptocurrencies, but he also acknowledged that many more new investors were entering the market. He stated:
“We’re entering a period of peak speculation-people are looking for the next get-rich-quick scheme, or 100X opportunity. The truth is, those 100X don’t come along often. And when they do, they usually come with a ton of risk, sometimes so much so that the lines get blurred between investing and gambling,”