Binance Is Investigating Squid Game Token, Considers It a Scam

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.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nelson Wang

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

Follow @NelWang on Twitter

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.