If you woke up in the morning and started scratching your head because you couldn’t understand the Bitcoin sell-offs the market was witnessing, we bet your first guess wasn’t a 3 Billion USD Chinese Ponzi scheme. Well, now you know better.
On August 14, Dovey Wan — founding partner of blockchain-based investment company Primitive Ventures — attracted attention towards the ongoing mass sell-offs from the fraudulent Chinese investment scheme, dubbed PlusToken.
PlusToken was created in mid-2018 and promised high returns to its members who were divided into 4 tiers. If you know about a Ponzi scheme, this in itself is enough to ring some bells, owing to the classic Ponzi structure of these “promises.” By early 2019, the project claimed to have over 10 million members.
Wan has attached data on all the wallet addresses — including Bitcoin (BTC), Ethereum (ETH) and EOS — known to be associated with PlusToken and has also urged exchanges and over the counter authorities to blacklist them. It was revealed that the core team members were even being hunted by the Chinese police 2 months ago. The investors had simply been scammed for 3 Billion USD.
Alongside the addresses, Wan has attached data from security audit firm Peckshield that reveals the money flow from PlusToken’s wallet as of early July, which just so happens to be the date the sell-offs are thought to have begun. Irrespective of the arrest, the cryptocurrency cannot reportedly be rolled back, as Wan explains:
“Many of their BTC addresses are started with P2SH which commonly used for mutil-sig, most likely some ppl who hold the keys are not being caught hence police can’t unlock the wallet. For EOS/ETH wallet can be diff case but so far police was not able to touch any of those.”
In an attempt to prevent more damage, she has recommended that Peckshield and blockchain analytics firm Chainalysis analyze the flows carefully, noting that PlusToken appears to be moving their funds in small batches of 50-100 BTC into exchanges.
Chinese traders have complained that an unknown address over Binance has been dumping 100 BTC in random wallets. Wan suspects this incident to be linked to the Ponzi scheme. If only accepting BTCs was as easy as seeing a wad of cash lying on your doorstep and pocketing it. As just reported, the PlusToken scheme was identified as being the largest single incident of loss in a recent summary of 2019 crypto-related theft from blockchain security firm CipherTrace.