The halal and haram status of squid is doubtful because of different opinions between different madhhab of Islam
According to the Maliki, Shafi’i, and Hanbali school of thought, All sea animals whether they are fish or not including squid are Halal with the exception of a few.
This jurisprudence doctrine expands the following verse and hadith to back their concepts.
Verse of Surah Maida:
It is lawful for you to hunt and eat seafood, as a provision for you and for travelers.
A man asked the Messenger of Allah (ﷺ): Messenger of Allah, we travel on the sea and take a small quantity of water with us. If we use this for ablution, we will suffer from thirst. Can we perform ablution with sea water? The Messenger (peace be upon him) replied: Its water is pure and what dies in it is lawful food.
(Sunan Abi Dawud 83)
Whereas the Hanafi school forbade the consumption of any seafood other than fish. They put forward their concepts with the help of the following hadith.
It was narrated from ‘Abdullah bin ‘Umar that the Messenger of Allah (ﷺ) said:
“Two kinds of dead meat and two kinds of blood have been permitted to us. The two kinds of dead meat are fish and locusts, and the two kinds of blood are the liver and splen”.
(Sunan Ibn Majah 3314)
A squid is not a fish. Fish contain vertebrae whereas squid does not have spinal cord and bones.
Islam is a beautiful religion that only forbade things for human safety and welfare including pork which may cause tapeworm diseases and Alcohol which has a hazardous effect on the liver.
Sea animals such as octopus, squid, and sea snakes are unhealthy choices because of poisonous offal and don’t categorize as halal in the Hanafi school of thought.
It is always best to avoid doubtful matters and refrain from consuming disputed foods and better go for the one with clear concepts.
Allah knows the best.