Several weeks ago, the squid token was released after clearly stating that it was not affiliated with the hit show—Squid game. When Squid Game came on Netflix, many users enjoyed how everything played out, helping the token grow within a short period. Many people did not know that the Squid token was a means to scam people of their money. While many people knew that the token's name might help it generate enough interest to assure gains, they did not know that they had fallen into a rug pull, capable of taking the asset's price to zero. In this article, we will be looking at the SQUID token and how to avoid crypto scams 2022.

Since the digital asset space thrives when new products that drive interest are created, many people utilize the opportunity to buy thousands of Squid tokens to benefit from any value increase. In Squid game, a game organizer brought in players in debt to participate in play-to-earn games. However, the game was the winner takes all, inspiring the Squid token.

One of the major red flags for the Squid token was the unrealistic whitepaper. Teams create whitepapers to inform interested investors of their plans in the coming months or years. However, when a whitepaper sounds too good to be true, it is probably too good to be true. The paper assured that the more the people who buy the token, the larger the pool will be, a significant part of a Ponzi scheme.

However, some people found it suspicious that a token would promise attractive rewards. Before the digital asset system was regulated correctly, many tokens came with different whitepapers and promises that never saw the light of the day. Some scammers use the opportunity to take away millions of dollars, leaving investors with tokens without liquidity.

When assets turn to zero, it’s often game over for users because they end up losing everything they have put into the investment. Thankfully, regulations have curbed some excesses in the digital asset space, but some users are victims of scams. Those who bought the Squid token saw their assets rise. The asset saw an incredible increase in value before people noticed its problem.

When the price doubled and even tripled at intervals, many people who bought were ready to sell their holding to secure their profits. However, many realized that they could not sell, which led to an uproar on Twitter. While many felt they had been scammed, others kept on believing that it was a glitch. Interestingly, the Squid token continued to grow, attracting mainstream news outlets. However, they failed to clarify that the Squid game token had no affiliation with the Netflix series. Because they failed to do this, many other users bought the token to join in the gains.

At a point, the token rose to $600 per coin. This, of course, made investors overjoyed as they watched their money grow. However, before they could withdraw, the creators had removed $3.35 million, the total amount of money invested into the token. After this, the token dropped around a quarter, leaving holders penniless.

A rug pull occurs when a developer or token creator makes away with an investor's money after getting them to invest in it. While rug pulls are every investor’s nightmare, you need to understand some signs of a rug pull. When you understand these signs, you can make a better purchase decision and not buy coins that seem suspicious or too good to be true.

One of the popular ways to pull a rug pull is to prevent investors from selling their holdings. This has to do with some manipulations, making it impossible for the exchange to buy the coin from the holder. And when the exchange does not buy, the token becomes useless to the investor. During this time, the developer sells all his holding, which is usually much, leading to a price crash.

Another way to pull off a rug pull is by removing liquidity. This means that the developer removes a large amount of money from the system. They do this by pumping the coin, buying a large amount, and dumping it after, leading to a price crash. Price crashes are not new to crypto investors. However, when a pump and dump occurs, the asset's value can drop close to zero.

While you may not always be correct in identifying scam tokens, you may reduce the chances of losing money. It’s also safe to mention that you should only invest an amount that will not hurt your savings or financial standing. Below are some red flags you need to keep track of when you want to buy a new asset:

When an asset is too good to be true, then it usually is. For instance, if the whitepaper makes some unrealistic promises, you should be suspicious in that instance. While it’s great to purchase a good asset, you need to buy one that can accomplish those promises and not just lie to get you to invest.

We're not saying that ALL meme coins are bad. Some of them have already established communities behind them. We're talking about any new project that tries to benefit from an already established project outside of crypto, and some developer creates a meme coin about it overnight.

Holders tend to gain or lose very fast. In any instance, it's good to understand the coin you are buying. Stay away from hype or meme coins if you want a long-term investment. Hype coins usually get a lot of attention and drop very fast. When users purchase tokens, most people are not interested in holding, and they may sell them off to assure gains.

Everyone invests in cryptocurrencies to record gains. While it's natural to expect gains from your investment, you should suspect foul play if the coin goes up too fast. For instance, Shiba Inu rose, helping holders gain rewards, but fell not so long after the increase. Whenever a coin is too volatile, you should suspect some manipulations.

This is a sure sign to help you know if a coin is worth buying. Because these scammers understand that they want to make away with money, they tend to give less information as possible to prevent the authorities from tracing the transaction. And because of blockchain anonymity, tracing account holders have been difficult.

Investing in a new project may help you grow your money within a short period. However, since it’s a new project, you don’t know what to expect from it. This becomes riskier when the new token has no particular value or use.

Frequently, tokens have use cases that are associated with the project. When the token is not contributing to the growth of any project, you should be worried because new projects are unpredictable, particularly when they don’t have real-world value.

Risk is a vital part of investing, but you should take reasonable risks. Buying a new token without a use case or Importance may lead to money loss, especially when it turns out to be a scam.

Despite the controversies associated with Squid game tokens, many people purchase Squidanomics. This game combines the thrills associated with the Squid game and ensures users can make money. Like other play-to-earn games in the digital asset community, it embraces the essentials of earning while enjoying the gameplay.

Launched on the 18th of October, Squidanomics is a Binance smart chain-based token that embraces Squid Game and tokenizes items for rewards. Today, many firms have the means to reward users, whether in non-fungible or fungible tokens. It brings NFY concepts into a metaverse that prioritizes earning through gameplay.

Metaverse is not new to the digital world. However, due to Facebook's outlook, other firms are now interested in creating the same to ensure adoption. It plans to be one of the most rewarding tokens on Binance Smart Chain and exploit the interest in Squid Game. When Squid Game was released months ago, it topped the charts on Netflix, making it one of the most-watched shows in 2021. Because of the loyalty Squid game commands, it’s natural that Squidanomics may want to exploit popularity for the asset's growth.

A metaverse is a virtual world that humans can only access through technology. For instance, many gamers use virtual reality gears to play virtual games, exploiting a new world. Facebook believes that creating a metaverse may help humans access technology in a better form. While this may be true, many creators create metaverse to ensure the adequate exploration of play to earn games.

While there have been many scam tokens, Squid token is one that many people will not forget any time soon. It made it necessary to duly research on products you want to buy, in a bid to prevent loss of funds. Naturally, cryptocurrency is a risky investment, which can either make or mere an investor. Still, you can gain from your assets when you make the right investment choices.

Every now and then, we hear about a crypto project that vanished after making millions in profit. Investors who partook in those projects are left crying in public forums, wondering what went wrong. In reality, crypto scams are somewhat easily noticeable. A few simple checks are enough to determine if the project is worth it or not. In this article, we are going to talk about those essential checks that investors need to do before partaking in any crypto project.

A phenomenon that has been getting worse in the last few weeks is the fake accounts of prominent influencers. The famous Twitter account Plan B addressed this topic lately in a tweet:

The number of fake accounts that ask fans of real accounts about cryptocurrencies to invest is also increasing on YouTube and Instagram. Some of these accounts are very similar to real accounts. Fake accounts are now one of the most widespread crypto scams.

More and more crypto scams are also occurring in which you receive an email claiming that data has been collected about you. The emails ask you to transfer Bitcoin to a specific wallet. Otherwise sensitive data about you would be published or your bank account would allegedly be emptied. Make sure to ignore these emails!

Some of these crypto scams are already serious criminals. There are certain groups of criminals who target owners of bitcoins and other cryptocurrencies. In some cases, they even want to gain access to the portfolios of crypto owners by force. 

Pay particular attention to your safety if you are invited to face-to-face meetings with people you do not know! In addition, never give your address or your whereabouts to an unknown person online!

The classic among the crypto scams is the so-called Ponzi scheme. You are promised that you can earn high returns by investing your bitcoins. With Ponzi schemes, however, returns come from other people's investments. This usually only earns the very first investors and the majority of them lose their coins. Ponzi schemes are not only present in the crypto area and unfortunately, work again and again.

The fake Bitcoin exchanges are among the most cheeky crypto scams. These pretend to be a large Bitcoin exchange that attracts you with extremely low fees. Their only job is to get your FIAT money out of your pocket. These scam exchanges often look very professional at first glance. Therefore stick to reputable crypto exchanges. These include Binance ,  Coinbase ,  Kraken,  and  Bitfinex .

The decentralized finance industry is one of the most distinct industries in the crypto market, as it boasts all kinds of financial products. With this, traders carry out millions in transactions every day, with most of the tokens having massive amounts locked in them. Despite the many opportunities to make profits in the market, it is not as safe as it should be. Besides regulation, there have been issues of scam artists ravaging the crypto market, trying to defraud investors. But while that is something that traders are now guiding against, there is another issue of Rug Pulls. This article will look at Rug pulls, and the top three Rug pulls in the DeFi sector this year.

A Rug pull is a scam relating to the founders of the developers of a project in the DeFi sector. In simple terms, developers Rug pull investors when a platform is closed after taking their money. A rug pull usually occurs after when the price of a token has skyrocketed. After that, the developers use a back door to drain the platform and steal finds belonging to clients. Regulations in the decentralized finance sector are not as intense as that of the centralized sector. This is why the security in the sector is not as strong as it should be. With this, malicious actors feel they can do anything they like with investors' cash.

With scams and hacks relatively known ills in the decentralized finance sector, a rug pull is carried out to wipe out all the token's market cap. They are a scam that signals the exit of developers and cash that belongs to clients. The modus operandi of these rug pull scammers is to create a token that will generate massive waves in the market. After generating a lot of attention, traders and investors troop in to invest their funds, trying it up in the liquidity pools. After seeing that they have had enough money in the liquidity pools, the developers then drain all the funds, which pushes the token in the red and brings losses to the investors.

Over the years, several projects that have resulted in rug pulls have entered the market, showing promise. Some projects have been backed by known entities, which ended up as Rug pulls. One of the reasons this act will continue in the market is the lack of regulation. Anyone who knows how to deploy a smart contract can develop a token and invite traders to invest their hard-earned money. Below are the top 3 rug pulls that have occurred this year.

AnubisDAO was launched on October 28 as a fork of OlympusDAO. OlympusDAO acts as a currency in decentralized finance backed by bond sales and fees from liquidity providers. Before the launch, the developers behind the token had a discord server for the token and ran a Twitter account that gave frequent updates.

Although there was no platform, investors poured about $60 million into the ICO, which would reward them with ANKH tokens. With the sale reaching 20 hours, someone transferred all the liquidity in the pool to an entirely different wallet. According to investors, many thought the token would get the mainstream adoption that other dog-inspired tokens have been getting.

Fast forward to days after, investors started to offer anyone who could provide vital information about 1,000 in Ethereum. Although a handle claimed that the developers suffered a phishing attack, everything pointed out that it was a clean sweep. With the look of things, the developers of AnubisDAO rug pulled investors, scamming them if $60 million in the process.

Meerkat Finance was launched on the Binance Smart Chain on March 3, seeing an inflow of investors making investments. A day after, Meerkat Finance announced that it had suffered a hack. According to the developers, hackers were able to gain access and siphoned $31 million. However, most of the investors said they thought the developers stole the funds.

The statement mentioned that its vaults had been breached, and the hackers have drained $13 million in BUSD and more than $17 million in BNB. Immediately after the hack, the protocol, social media, and official platform went dark. With that, investors could not get hold of the developers, pushing them to conclude that they had been Rug pulled. Although Binance said it would look into the rug pull, the investigators have done nothing since then.

TurtleDEX entered the Binance Smart Chain on March 15, saying it would provide users access to secure storage to store data online. In its presale, the decentralized exchange was able to raise about $2.4 million in two hours. In just five days after the launch took place, the developers of the platform rug pulled investors.

According to records, all the liquidity in the pools belonging to the platform on ApeSwap and PancakeSwap got drained. From the records on Etherscan, the funds in the liquidity pools were drained and exchanged to Ethereum before being moved to a list of Binance wallets. After the act took place, the developers deleted their Twitter and Telegram before taking their platform offline.

The Squid token debuted on decentralized exchanges such as Dodo and PancakeSwap, with the listing boosting its price to more than $2,800 per token. Before the curtain fell on the massive rise, its developers had rinsed everywhere clean, and Rug pulled investors. According to the record, the website, social media accounts that belonged to the developers were nowhere to be found in the morning that followed.

To worsen the situation, the developers exchanged the SQUID tokens in the liquidity pool to BNB, carting away about $2 million in the process. However, the official telegram of the token said scammers stole the lost tokens, and the group would be dissolved due to depression on their side.

One thing that is harder than every other thing in the decentralized finance sector is to spot a fraudulent account. You should endeavor to be vigilant and not get carried away by most projects that look too good to be true. Another thing is to conduct deep research on projects, tokens, and anything new in the DeFi sector before you decide to go all in. Although most scammers and hackers can mask their activities and defraud people, deep research will expose and help traders in the market.