Squid Game Season 2: A Window Into Popular Culture and Crypto Scams

If you’ve binged the brand new second season of Netflix’s smash hit Korean drama, “Squid Game,” you should be familiar with Player 333, aka crypto influencer Myung-gi Lee. 

For the uninitiated, the show centers around individuals in desperate financial straits being recruited to participate in the eponymous Squid Game — a series of Korean childhood games with a deadly twist — all for the promise of a KRW 45.6 billion (USD 30.9 million) grand prize.  

Lee, formerly a prominent YouTuber behind the MG Coin crypto channel, finds himself in the game after going all-in on the Dalmatian coin, which crashes after its creators make off with all invested funds in a classic rug pull. To make matters worse, he’s also told all his followers to invest “every last penny,” and violated various laws, putting a target on his back from both his followers and the authorities. He’s a bankrupt, wanted man.

Say rug?

Rug pulls, or exit scams, occur when the operators of a project — one often related to investments or a new token — stop developing the project and withdraw user funds for themselves. This can either happen abruptly, where project devs and funds suddenly disappear, or they can occur more slowly, where money is siphoned off a bit at a time and devs get less and less active. Sometimes, projects are called rug pulls by the community when they over-promise and under-deliver, though this is more difficult to outright label as fraud.

In a rug pull related to a new token, the project creators can withdraw liquidity from the trading pool, causing the value of the associated tokens to plummet. Investors are subsequently left with worthless tokens and no way to recover their funds. Many pyramid and Ponzi schemes end in rug pull-like behavior, where payouts stop being made to investors and the creators of the scheme take the remaining funds and disappear.

Art imitates life…

As art often imitates life, lead actor Jung-jae Lee noted that “the 'Squid Game' arena is actually a miniature of our society.” The inclusion of the Myung-gi Lee character and the Dalmatian rug pull in “Squid Game” is very much social commentary. 

Crypto scams, including many promoted by YouTubers like Myung-gi Lee, have hit Korea hard in recent years. According to data from the Korea Financial Intelligence Unit (KoFIU), crypto-related crime reports increased by 90% from 2022 to 2023, while the number of suspicious transaction reports filed by VASPs increased 49%. Various Korean celebrities have found themselves under fire for promoting apparent crypto scams.

And, in November 2024, Korean police dismantled one of Korea’s largest crypto scam networks, which saw 215 arrested for allegedly scamming KRW 325.6 billion (USD 232.7 million) from 15,304 people between December 2021 and March 2023. At the center of the scam was a crypto influencer known as Mr. A, who ran a YouTube channel with over 620,000 subscribers. Mr. A is alleged to have issued several scam tokens and manipulated their value. 

But this is not a uniquely Korean problem. Last year, TRM found that scams and fraud contributed to over a third of total illicit crypto volumes, or approximately USD 12.5 billion. Celebrities such as Floyd Mayweather and Kim Kardashian have also faced enforcement and litigation for the promotion of alleged crypto scam tokens.

…and life imitates art

It is not just art that imitates life; the reverse is also true. Within a day of the series’ launch, a brand new SQUID token made its way onto the blockchain, bearing signs of scam activity.

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However, it did not experience very much success, unlike a 2021 predecessor that launched after the first season. The 2021 SQUID token scam saw at least 2,693 ETH (USD 1.1 million at the time) in proceeds. The creators executed a rug pull using a rigged smart contract, causing the token’s value to completely crash after surging 40,000% over the course of a few weeks. 

In the days following the launch of Squid Game Season 2, at least ten other Squid and Dalmatian memecoins have also emerged, likely to capitalize on the hype around the series, but none have gained significant traction. 

Staying vigilant against memecoin-related scams

With memecoins gaining ground amidst the crypto bull market, it’s especially critical to guard against memecoin-related scams. Always look out for telltale signs such as:

• Spam or bot-like interactions: Scammers often use bots to generate hype with generic phrases
• Concentration of holdings: If a few wallets hold most of the tokens, the token is at risk of manipulation
• Anonymity or intransparency: If there is little information about the coin or its creators, this could be a sign of a scam

You can also look up an address or URL on Chainabuse, our free, open source fraud and scam reporting platform, to check if it is associated with a scam. We also provide free, instant support to victims and use the reports to work with law enforcement authorities where appropriate. If you fall victim to fraud or scam involving crypto, report it at Chainabuse.com.