Binance Is Investigating Squid Game Token, Considers It a Scam

The crypto exchange is considering blacklisting wallet addresses tied to the token’s developers.

Nov 3, 2021 at 9:00 p.m. UTC
Updated Nov 4, 2021 at 6:54 p.m. UTC

Crypto exchange Binance is investigating the SQUID token crash and considers it a scam, a company spokesperson confirmed to CoinDesk.

  • Binance is exploring options to help those harmed, including “blacklisting addresses – preventing withdrawals from Binance accounts which we linked to the scam – affiliated with the developers and deploying blockchain analytics to identify the bad actors,” the spokesperson said.
  • Binance will also provide their findings to law enforcement officials in the appropriate jurisdiction.
  • The price of SQUID has increased about 660% in the last 24 hours, according to CoinMarketCap, following the announcement of the Binance investigation.
  • The play-to-earn SQUID protocol is built on Binance Smart Chain (BSC), but Binance emphasized that BSC is an open-source ecosystem and so the company does not have oversight over projects built on the network.
  • “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,” the spokesperson said.
  • As reported earlier this week by CoinDesk, the price of the SQUID token has crashed to nearly zero and its developers have said they’ve left the project.
  • Barron’s first reported on the investigation. The token’s developers appear to be using Tornado Cash to cover their tracks, Binance told Barron’s.

UPDATE (Nov. 3, 21:39 UTC): Updated to include confirmation and statements from Binance.

UPDATE (Nov. 4, 15:43 UTC): Added SQUID’s recent price move in third bullet point.

UPDATE (Nov. 4, 18:54 UTC): Added clarification from Binance on what it meant by ‘blacklisting’ in first bullet point.

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Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.