"Squid Coin Rug Pull" How does it happen right under your nose? Uncover the 9 major warning signs behind the scam

The 2021 “Squid Game” crash event that shook the crypto world is regarded as one of the most classic rug pull cases in cryptocurrency history. This blockchain game token SQUID, launched with the hype surrounding the popular Korean drama “Squid Game,” surged over 35,000% in just three days, only to plummet to zero immediately after reaching a high of $2,856. The project team executed a textbook-level rug pull escape, leaving investors bewildered: why was this scam not exposed in time?

What is a Rug Pull? A Carefully Designed “Runaway Scam”

A rug pull is a notorious term in the crypto space, simply meaning that the project team builds hype and attracts funds upfront, then suddenly vanishes with the money. Unlike traditional scams that are blunt and crude, rug pulls are often packaged elegantly—beautiful official websites, detailed whitepapers, active communities—but in reality, the project team has left backdoors in the smart contracts, allowing them to withdraw all liquidity at any time, causing investors’ funds to evaporate instantly.

The SQUID rug pull was such a setup. When the token price hit its peak, the developers simply pressed a button, liquidity disappeared, and the tokens in investors’ hands became worthless digital assets.

From 35,000% Surge to Zero: How Squid Game Became a Rug Pull Textbook

The SQUID token was sold out instantly during its presale on October 20, and after launch, it skyrocketed. But what no one expected was that after reaching the peak on November 1, the project team quickly executed a rug pull. According to CoinMarketCap data, SQUID’s price plummeted 99.99% within 24 hours, while trading volume bizarrely increased by nearly 300%—a clear sign of investors helplessly selling off.

Most ironically, the developers even claimed on their Telegram channel that they had been “hacked” to explain away the rug pull. However, industry insiders saw through this immediately: it was a staged exit orchestrated by the project team. Tracking data from BscScan shows that addresses marked as “suspected of participating in Rug Pull” sold off SQUID tokens and exchanged them for over $2 million worth of BNB tokens, even using mixers to obscure the fund flow.

Nine Red Flags Investors Ignored

A careful review of the SQUID rug pull process reveals warning signs everywhere, yet greed and enthusiasm masked them.

First, the SQUID whitepaper was poorly written, filled with grammatical errors and typos, lacking basic professionalism. Second, the official website was registered less than a month before launch, appearing rushed and unprofessional. Third, Netflix officially clarified that SQUID was not officially licensed, but this statement was drowned out by hype.

CoinMarketCap issued an early warning, labeling the token as high risk. Trading records on Pancakeswap also showed anomalies. The community platforms were even more exaggerated—directly marking SQUID-related accounts as “suspicious.” When the original account with 70,000 subscribers was restricted, the developers tried to open new accounts to cover their tracks.

The most technically revealing red flag was the “anti-sell” mechanism mentioned in the game whitepaper. On the surface, it was meant to protect small investors, but in reality, it left a backdoor for the project team to bypass restrictions—this was the key to the smooth execution of the rug pull later.

On-Chain Tracking Reveals the Truth: How $2 Million Disappeared Mysteriously

While blockchain transparency cannot prevent rug pulls, it can expose the full truth afterward. Data from BscScan shows that the liquidity drained was ultimately transferred to addresses suspected of rug pulling. Over $2 million worth of BNB tokens were subsequently sent to mixers to obscure the fund flow—but such attempts are transparent on the blockchain.

Industry insiders speculate that the developers had embedded backdoors in the contract code long ago. When the timing was right—usually when the price reached a preset high and liquidity was substantial—they triggered the rug pull mechanism. The entire process was precise to the second, with escape routes planned down to the millimeter—making Squid Game’s rug pull a meticulously designed escape.

Investor Self-Protection Checklist: How to Spot Rug Pull Traps

After experiencing a rug pull like Squid Game, the crypto community distilled a core risk identification checklist:

Check project documentation quality, verify official licensing, review team backgrounds, analyze contract code, observe community attitudes, and track fund flows. Most importantly, be cautious of tokens with abnormal short-term price surges—they are often the next candidates for rug pulls.

Today, SQUID has become a textbook case, reminding every investor: in the ocean of cryptocurrencies, greed and passion are often the deadliest enemies. Only by developing the ability to identify rug pulls can you survive longer in this endless game.