The cryptocurrency markets are currently seeing a significant downturn. Amid this, it would now appear that a massive $3 billion crypto Ponzi scheme is crashing Bitcoin prices. This comes as this Chinese Ponzi scheme is reportedly staging a major sell-off.
$3 billion crypto Ponzi scheme depressing the markets?
According to Wan, PlusToken was initially launched back in 2018. Furthermore, these scheme supposedly promised investors high-yield investment returns. Moreover, these returns were received at different discount percentages, which varied depending on what “tier” members were.
Although this seems eerily similar to a Ponzi scheme, the PlusToken project said that it had attracted over 10 million members by early 2019. Wan tweeted an attachment with known addresses linked to the PlusToken scheme, urging crypto exchanges to take action.
However, she also notes that the addresses are only a fraction of the total. What’s more, Wan says that “according to police report the total scammed amount is about $3B”. Nevertheless, Wan also said that PlusToken has already felt some legal repercussions.
“The core team member[s] were chased down by police two months ago and will be in jail for decades. However, the cryptocurrency they scammed is not able to be crawled back.”
Crypto Ponzi scheme sell-off is reportedly depressing Bitcoin price
According to Wan, many of the Bitcoin addresses from PlusToken affiliates start with P2SH, “which [is] commonly used for multi-sig”. She also said that most likely, there are still PlusToken affiliates still at large holding the keys – seeing as police cannot unlock the wallets affiliated with PlusToken.
Perhaps even more notably, Wan also shared a graphic from the security audit firm Peckshield. This, included above, shows the money flow from PlusToken’s wallet in early July. As such, it seems to suggest that around 1000 Bitcoin have already “gone into Bittrex and Huobi”.
As such, Wan notes that the sell-off likely began in July, but now appears to have intensified. This corresponds to Chinese, reports that “someone has been dumping 100 BTC non-stop on Binance”, according to Wan.
What’s more, the PlusToken scheme has recently been identified as the “largest single incident of loss” in a recent 2019 crypto-related theft summary.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.