Squid coins, meme coins

The combined value of all cryptocurrencies surpassed $3 trillion on Monday, November 8. Bitcoin and ethereum have “more than doubled since June,” Christian Parisot, analyst at broker Aurel BGC told AFP.

In full expansion of the cryptocurrency market, scams and speculative outbreaks are multiplying: a cryptocurrency inspired by the “Squid Game” series with millions of dollars of investment evaporated, canine-themed crypto assets that proliferate…

“Any team of developers can create an application and issue a cryptoasset ,” warns Martha Reyes, who heads up research at the cryptocurrency trading platform Bequant, interviewed by AFP.

The boss of the policeman of the American markets, Gary Gensler, had moreover qualified this summer of “Wild West” this sector in exponential growth with Meme Coin.

The rug pull scam

The “Squid coin” illustrates the dangers for unsuspecting investors: this cryptocurrency . Created on the theme of the hit Netflix series by anonymous people with no connection to the online viewing giant, has experienced dizzying success in a few days end of October.

According to some assessments, the market value of this cryptocurrency then exceeds $30 million. But buyers find they can’t sell it and cash in their profits, and in early November. The creators disappear from social media as the price crashes.
Even if the exchanges seem to have resumed, the sums invested have been siphoned off . And investors are searching in vain for explanations online.

“It’s a very visible type of scam that we call ‘rug pull'” , explains to AFP Eswar Prasad, economist at the American University of Cornell, who sees in it “the one of the many ways in which naïve retail investors are lured into the promise of high gains, leaving them vulnerable .

Defib challenge

The vertiginous performance of the cryptocurrency market, whose value has increased sevenfold in one year, is indeed attracting uninformed buyers.

Even if they are particularly present, like their victims, in Eastern Europe, “these scammers operate on a global scale , recalls Kim Grauer, in charge of research for the firm Chainalysis. The rapid growth of decentralized finance (or DeFi) and investor ambition has created the perfect environment for rug pulls. ”
To buy Squidcoin, investors had to connect to a decentralized platform, PancakeSwap.

In France, Romain Chily, a lawyer at the firm ORWL, specializing in cryptocurrencies, says he sees “every month” new cases of cryptocurrency scams.
According to him, DeFi has “a lot of products that work quite well, but for savvy investors” . And he advises “not to start there” because, in the event of a problem, “the chances of recovering your funds are extremely slim. » .

He recommends turning to sellers accredited by the Financial Markets Authority (AMF) and verifying that the platform is not on the blacklist of the financial policeman.

Costly jokes

Even on regulated platforms, the seriousness of certain projects leaves one skeptical. Since the beginning of the year, two canine-themed cryptocurrencies, dogecoin and Shiba Inu.

But professionals make a difference with scams: “ It’s a branding exercise. It rather reminds me of the surge in GameStop and AMC shares at the beginning of the year. Which had no connection with the intrinsic value of these companies ,” comments Ms. Reyes.

The same goes for Joshua Barraclough, who runs the “pro” version of the Austrian-based BitPanda cryptocurrency trading platform.  Does that look dodgy? If it looks like it, it probably is . ”

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