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 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 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.