In late October 2021, at the absolute peak of Netflix’s Squid Game cultural moment, an unaffiliated memecoin called SQUID launched on Binance Smart Chain. It had no connection to the show, no license, and no disclosed team. But it had perfect timing, and within hours it was running. The token climbed from fractions of a cent to over $2,800 in less than a week — a rally of more than 230,000%.
Then the holders tried to sell. Nothing happened. The contract contained a “honeypot” mechanism: a hidden function that allowed only specific whitelisted addresses (the developers) to sell tokens. Every other holder was locked in. As retail panic set in, the developers drained the entire liquidity pool. On November 1, 2021, SQUID went to zero. The developers walked away with approximately $3.38 million in stolen funds.
The CoinMarketCap listing page for SQUID became a monument to crypto recklessness — it had prominent warnings that users could not sell, but retail bought anyway. Major news outlets including the BBC and CNN covered the scam, largely because the Squid Game brand connection made it a story anyone could understand. For a brief moment, memecoin rug pulls were on the front page of global media.
The SQUID token became the textbook example of a honeypot scam. It’s taught in security courses, cited in regulator reports, and referenced anytime a new memecoin launches with suspicious tokenomics. Its legacy is a practical one: it trained an entire generation of memecoin traders to check for sellability as the single most important security property before buying anything. The lesson cost $3.38 million to learn, but it probably saved hundreds of millions in future rugs.
Leave a Reply