The following article was written by CZ, Binance CEO & Co-Founder.
DYOR, or do your own research, is a concept I think every investor should know about. It’s as close to a golden rule as anything in the world of crypto, but it applies more even broadly to anything you’re planning to invest in, from Bitcoin and bonds to stablecoins and stocks.
Earlier this week, the anonymous developers behind a DeFi project named Squid Game token abruptly performed a “rug pull”, a common scam where the team behind a crypto project takes off with users’ funds. Because these scams are becoming more commonplace as the DeFi space grows, I’d like to take this opportunity to remind users that DeFi is not without its risks, and we hate to see anyone lose their funds due to scams and other cybercrimes.
Squid Game Tokens: What Happened and Why?
Last week, a cryptocurrency called SQUID began trading on PancakeSwap, a decentralized exchange. It quickly gained traction among users, many of whom thought there was an association between the project and the recent Netflix hit series, “Squid Game”.
The project was not without its red flags, which attentive users were quick to spot. Users who bought the token reported that they weren’t able to sell it, and any official association to the Netflix series was quickly disproven.
Despite the warning signs, speculators continued to buy the token, pushing prices up exponentially before the project founders drained the liquidity pool in minutes, taking off with investors’ funds in the process.
Why Can’t These Projects Be Banned or Delisted?
Some may ask, why can’t Binance do something about DeFi projects like SQUID? I think it’s important here to explain that blockchains like
