Alleged Bitcoin Ponzi scheme Plus Token could be liquidating billions of dollars in stolen crypto, says VC

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Allegedly collapsed China-based Ponzi scheme Plus Token may be liquidating on exchanges portions of a reported $3.5 billion cache of stolen cryptocurrency, according to venture capitalist Dovey Wan, who is now appealing to the crypto ecosystem to spread awareness of the “critical” matter “before it’s too late”.

If everybody can help RT this and @ the onchain analysis expert you know please do.

This critical incident has been overlooked bu the western community and will need all hands on deck to chase the scammed fund and freeze it before it’s too late @cz_binance @jespow @APompliano https://t.co/toH9we2QW0

— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019

Wan, a CoinDesk contributor known for her inside knowledge of the Chinese market, reported the claim Thursday in a tweet. If accurate, Wan’s revelation would shed light on the recent sell-pressure that has seen BTC lose thousands of dollars in days and descend below the bull’s psychological bedrock level of $10,000.

JUST IN

as per sir @loomdart ‘s request, this thread is abt the on-going sells off made by PLUS Token, the biggest Chinese PONZI which scammed ~70K $BTC + ~ 800K $ETH

I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells pic.twitter.com/uIjgrzwHET

— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019

According to Wan, Plus Token still has control over the vast sum of cryptocurrency and has been disbursing parts of it to exchanges including Huobi, Bittrex and Binance, and attempting to launder the remainder of the coins by splitting the sum between a number of wallets not knowingly associated with the company. She believes the sell-off began in early July.

4. A security audit firm Peckshield has done a graph analysis of the money flow from PlusToken’s wallet in early July, and figured out abt total ~1000 has gone into Bitrrex and Huobi. So basically the sells off has started around early July pic.twitter.com/uDXw1vt38t

— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019

A brief history of Plus Token

Plus Token debuted in June 2018 with a profit-sharing cryptocurrency wallet reportedly entitling users to monthly interest of 6-18 percent on all deposited cryptocurrency, citing many of the unproven claims and extravagant marketing tactics associated with the now-defunct Ponzi scheme BitConnect, including bot-based trading and arbitrage—to generate profits.

On June 27th, 2019, a number of Plus Token Wallet users centered in China, South Korea, and Japan, according to various reports, began to state being unable to withdraw their assets from the mobile-based crypto wallet.

The news did little to develop further than widespread allegation the Plus Token team had run off with as much as $3 billion worth of user funds and did not trigger the media frenzy expected of such an outlandish event.

Little-known, China arrests core Plus Token team

Yet just days after the first reports of faltering withdrawals emerged, June 29th, a perhaps deliberately opaque piece by the South China Morning Post revealed that six Chinese nationals were arrested in Vanuatu by Chinese law enforcement for operating an unnamed “internet scam” from the Pacific island. The article did not disclose further details.

Later, Alibaba-backed Chinese tech news site 36KR would reveal that the six apprehended in Vanuatu were none other than the founding members of the Plus Token team, and that a “person close to the police” put the total amount of crypto misappropriated through the scheme at 20 billion Chinese Yuan (approximately $2.85 billion).

Wan’s estimates, however, may indicate a significantly larger figure if correct. Having reported that up to 200,000 BTC and 800,000 ETH has been traced back to Plus Wallet addresses, Wan would put the total amount of funds “scammed” by Plus Token close to $3.5 billion.

Correction, this fucking scam at least scammed over 200K $BTC as I dug out my old chats to compile all their wallet addresses this is nuts https://t.co/E8bJFIf8h8

— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019

Why aren’t exchanges on alert?

Though little-reported, the scandal has an immense scope and could come to be realized as the largest exit scam in the history of cryptocurrency.

Cryptocurrency exchanges may be unaware of the apparent scam, according to Wan, who said Chinese authorities had not publicized the information due to red tape:

Reasons why exchanges are not patting attention to the 200K $BTC scam PlusToken

1. It’s not known outside 🇨🇳 (maybe 🇰🇷)
2. Chinese exchanges didn’t do anything as it’s “closed” by police
3. Chinese police didnt work with exchanges as crypto exchanges are not legal in 🇨🇳

🤦🏻‍♀️🤦🏻‍♀️

— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019

If indeed exchanges are not aware of such a colossally illicit operation, the saga could unfold into another Mt.Gox-style blow to sentiment in the crypto ecosystem as the remaining members of the Plus Token team cash out their holdings in what would invariably be the single-biggest liquidation of stolen funds to date.

CryptoSlate has reached out to Wan for further comment.

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