Chainalysis has traced the PlusToken team’s attempts to sell ill-gotten bitcoin through Huobi OTC desks, potentially influencing the BTC price.

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Chainalysis: PlusToken Dumping May Be Dropping Price - Bitcoin Magazine

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The most devastating cryptocurrency Ponzi scheme in history may be contributing to bitcoin’s 2019 price decline.



That’s according to blockchain analytics company Chainalysis, which has been tracking funds from the roughly $3 billion PlusToken scam since the <a href="https://bitcoinmagazine.com/articles/how-the-plustoken-scam-absconded-with-over-1-percent-of-the-bitcoin-supply">thing blew up</a> at the end of June 2019. As the scammers have scrambled to obfuscate hundreds of millions of dollars’ worth of bitcoin they accrued, they’ve left a trail on the Bitcoin blockchain, and Chainalysis has been following it for months.



And according to <a href="https://blog.chainalysis.com/reports/plustoken-scam-bitcoin-price">its research</a>, released in a recent blog post, these movement dead-end at a handful of independent over-the-counter (OTC) desks that operate on the Huobi exchange. If Chainalysis’s findings are to be believed, the scammers have sold some 25,000 BTC for just shy of $200 million in profit — and they’ve got at least another 20,000 that’s been untouched since September 2019.



<h2>Ponzi Shuffle</h2>



PlusToken was a cryptocurrency Ponzi scheme that operated for nearly a year. The scheme coaxed “investors” to deposit bitcoin, ether and other cryptocurrencies by promising monthly returns of up to 30 percent in bitcoin or its eponymous plustoken. Before rupturing following the arrest of six employees in late June 2019, the scam corralled $2 billion in various cryptocurrency deposits.&nbsp;



The majority of these deposits were in bitcoin — some 180,000 BTC or roughly 1 percent of the outstanding supply. Some of these funds were paid back out to token holders to keep up appearances, and Chainalysis was able to trace the movements of 70,000 BTC that was confirmed stolen by police reports shared by Primitive Ventures partner <a href="https://twitter.com/doveywan/status/1161686134314848256?lang=en">Dovey Wan</a>.



PlusToken’s remaining team has apparently spent the second half of 2019 mixing these coins and liquidating them via OTC desks through Huobi, Chainalysis claimed. When asked how the blockchain analytics firm was able to trace the coins after they had been mixed, Chainalysis economist Kim Grauer said that the scammers’ mixing (or their attempt to transfer their coins to new wallets in a way that would make tracing their origin nearly impossible) was sloppy.



“They didn’t mix properly,” she told Bitcoin Magazine, adding that a couple of mixers were used, namely self-mixers and Wasabi wallet. Playing it on the safe side, Chainalysis was able to fully verify some 45,000 mixed coins out of the 70,000 attributed to the PlusToken team.



This corroborates <a href="https://medium.com/@ErgoBTC/tracking-the-plustoken-whale-attempted-bitcoin-laundering-and-its-impact-on-wasabi-wallet-787c0d240192">findings</a> by independent and anonymous researcher <a href="https://twitter.com/ErgoBTC">ErgoBTC</a>, though they identified 54,000 mixed coins in total. These coins were shuffled between August and September 2019, ErgoBTC argued in an <a href="https://medium.com/@ErgoBTC/tracking-the-plustoken-whale-attempted-bitcoin-laundering-and-its-impact-on-wasabi-wallet-787c0d240192">October 2019 blog post</a>. Roughly 19,000 of these bitcoin were mixed using CoinJoin through Wasabi, and another 35,000 were “self-shuffled,” per the post.



This self-shuffle was highly insufficient for obfuscating the funds, ErgoBTC concluded, partly because the scammers reused addresses. And the Wasabi wallet mixing wasn’t up to snuff, either, partly because they reused addresses again and partly because of other patterns in mixing behavior (such as sending BTC to Wasabi mixers in chunks of 10 to 25).&nbsp;



They also noted that the scammers were likely running multiple Wasabi clients to mix with themselves; this would essentially amount to a Sybil attack in which the PlusToken team assumed the majority of mixing volume on Wasabi and had to mix with themselves.



<h2>OTC Laundering</h2>



Most of these mixed coins have ended up on Huobi, and they’re being sent to accounts associated with OTC desks, Chainalysis claimed.



<figure class="wp-block-image"><img src="https://lh4.googleusercontent.com/TATM94ZlH9ow3j7O39TirMUiWxGJpLYr6KBKEAN4HCteIca2ghP08iqS6OrgdS9f8IVjolbYGibbm-NdyDPeWIZV1KvGwGBO1EC9iBLQcvPf1rh-kzfwStuxwkqg0tfIAgrc6fII" alt="Chainalysis has traced the PlusToken team’s attempts to sell ill-gotten bitcoin through Huobi OTC desks, potentially influencing the BTC price."/><figcaption>Source: <a href="https://blog.chainalysis.com/reports/plustoken-scam-bitcoin-price">Chainalysis</a></figcaption></figure>



Grauer told us that Chainalysis has linked the Huobi addresses to OTC brokers “from years of investigators building up profiles” on these firms. Many of them, she continued, have low KYC requirements, something that causes a clear gap in compliance and regulation.&nbsp;



These low-KYC desks often accept bitcoin at a discount — this amounts to a premium for buying up tainted, stolen or, in this case, scammed coins. They will then flip these coins on the market or sell them again to another OTC desk, which charges another premium.



“We see a lot of whirling around in this OTC world,” Grauer said, referring to how the firms play “hot potato” with dirty bitcoin to launder it.



When I asked whether or not Huobi knows this is happening — or if it plays matchmaker for these unscrupulous market makers, who Grauer said provide “so much liquidity” for the exchange — she didn’t make any judgments.



“We don’t know exactly what’s going on with Huobi — what’s allowing [this] to happen. We can only see what’s on the blockchain,” she said.&nbsp;



Chainalysis has tried to contact Huobi to no avail; Bitcoin Magazine also sent Huobi a request for comment but did not receive a reply as of the time of this writing.



Grauer didn’t know how the OTC desks were paying out the PlusToken scammers, whether it be in cash, bank wires, puppet bank accounts or in USDT, though Chainalysis found that the team did trade some BTC for USDT directly on Huobi through accounts unrelated to the OTC desks.



<h2>Plus Equals Minus?</h2>



Chainalysis’s months-long research concluded with the hypothesis that bitcoin’s recent price declines coincide with an influx of bitcoin flows from the PlusToken scammers to OTC accounts on Huobi.



“… spikes in on-chain flow to OTC brokers correlate with drops in Bitcoin’s price,” the Chainalysis report emphasized.&nbsp;



The post also made particular note of a September 20, 2019, transaction of $34 million that was followed by a roughly $2,000 drop in the bitcoin price from $10,000 to $8,000 from September 24 to 26, 2019. It found that PlusToken had cashed out roughly 25,000 BTC (about $165,000,000 at today’s valuation) since August 2019 and has another 20,000 BTC (roughly $130,000,000 at the time of writing) waiting on the sidelines.



This correlation doesn’t prove that PlusToken is causing the price to decline, Chainalysis admits. However, it ran a regression analysis to check bitcoin’s average 40-minute volatility against movements to the OTC accounts, and it found a “statistically significant relationship between PlusToken transfers to Huobi OTC brokers and Bitcoin price volatility for the period of time between September 23rd and 28th.”



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/NBgKyqNzffxz4iO0CD4X3OuhQG_c3OXMQwPxCvGZ1PVemPMS2eRw2LyCLKkA1bzVYJXhhXJuNi2XrjAKoL2i85HPXDIjUEJikI1tr7HQMEll-jOduVtXF0GUxeo_kHCjWY6lJub2" alt="Chainalysis has traced the PlusToken team’s attempts to sell ill-gotten bitcoin through Huobi OTC desks, potentially influencing the BTC price."/><figcaption>Source: <a href="https://blog.chainalysis.com/reports/plustoken-scam-bitcoin-price">Chainalysis</a></figcaption></figure>



As with the example of the $2,000 price drop, this relies on analysis of a singular price event within a single, multi-day window. John Jeffries, the chief financial analyst at blockchain analytics company CipherTrace, agreed that the scammers are cashing out on Huobi but believes “it has nothing to do with the current BTC price action.”



Chainalysis ultimately thinks it’s impossible to tell for sure, but it still believes that PlusToken’s selling has impacted overall price volatility to some degree.



“Unfortunately, because it’s not possible to distinguish between trades made by OTC brokers in possession of PlusToken funds and all other trades made on Huobi, we can’t say for sure that PlusToken cashouts caused Bitcoin’s price to drop,” per the Chainalysis blog post. “However, we can say that those cashouts cause increased volatility in Bitcoin’s price, and that they correlate significantly with Bitcoin price drops.”



Coin Metrics co-founder Nic Carter commented that he finds Chainalysis’s general analysis “persuasive,” and he said that he wouldn’t be surprised if PlusToken helped to inflate 2019’s mini-bubble.



“I do think it's plausible,” he told Bitcoin Magazine. “I think the converse is also likely true, that PlusToken scooping up huge fractions of supply in the first half of 2019 was one of the main reasons we shot up to $14,000.”&nbsp;



He also thinks that Chainalysis is “lowballing [its] figure” for how much has been liquidated “out of prudence or incomplete data.”&nbsp;&nbsp;



Grauer mentioned in our conversation that some of the coins Chainalysis was following got lost in the mixing process, so they were left out of the final findings.



<h2>Shadow Brokers</h2>



Whether or not PlusToken’s cashing out is crashing the market, Grauer believes that the OTC web of liquidity (much of which is from dirty funds) exposes a serious gulf in the current regulation and compliance landscape for the mainly Chinese and Southeast Asian OTC desks.



It also offers a glimpse into how this underground band of OTC desks is providing criminals with liquidity in the shadows of the financial system.



“Anecdotally, we’ve been honed in on this laundering infrastructure of people who move stolen and scammed money and they have a process,” Grauer said.&nbsp;



If Bitcoin is the cyber wild west, then these OTC desks are like fences — black-market merchants who buy stolen goods at a discount and resell or trade them.&nbsp;



Huobi probably doesn’t audit these OTC desks’ customers or their KYC requirements, Grauer assumes, and she said that there’s generally a lot of regulatory ambiguity over what these KYC requirements should be. Moreover, there’s little to no transparency into the order books of these market makers for their trades via Huobi.



These missing pieces leave even the most determined blockchain analyses with a puzzling picture of how this dark liquidity affects bitcoin’s market and spot price. The role of these “usual suspects,” as Grauer calls them, in Bitcoin’s shadow markets is up for debate, but events like PlusToken’s attempt to obfuscate its movements give researchers the ability to shine a little light on them.



Still, questions about their direct impact on market dynamics will take a long time to answer.

Bitcoin Magazine provides news, analysis, information, commentary and price data about Bitcoin.

Bitcoin Magazine

Colin is an associate editor and staff writer for Bitcoin Magazine. He&#39;s proud to call Nashville his home, where he lives with his family and doesn&#39;t eat hot chicken as much as you might think.

Colin Harper

Chainalysis: PlusToken Dumping May Be Dropping Price

Chainalysis has traced the PlusToken team&rsquo;s attempts to sell ill-gotten bitcoin through Huobi OTC desks, potentially influencing the BTC price.

Chainalysis: PlusToken Dumping May Be Eating Price - Bitcoin Magazine

The most devastating cryptocurrency Ponzi scheme in history may be contributing to bitcoin&rsquo;s 2019 price decline. That&rsquo;s according to blockchain analytics company Chainalysis, which has been tracking funds from the roughly $3 billion PlusToken scam since the thing blew up at the end of June 2019. As the scammers have scrambled to obfuscate hundreds of millions of dollars&rsquo; worth of bitcoin they accrued, they&rsquo;ve left a trail on the Bitcoin blockchain, and Chainalysis has been following it for months. And according to its research, released in a recent blog post, these movement dead-end at a handful of independent over-the-counter (OTC) desks that operate on the Huobi exchange. If Chainalysis&rsquo;s findings are to be believed, the scammers have sold some 25,000 BTC for just shy of $200 million in profit &mdash; and they&rsquo;ve got at least another 20,000 that&rsquo;s been untouched since September 2019. Ponzi Shuffle. PlusToken was a cryptocurrency Ponzi scheme that operated for nearly a year. The scheme coaxed &ldquo;investors&rdquo; to deposit bitcoin, ether and other cryptocurrencies by promising monthly returns of up to 30 percent in bitcoin or its eponymous plustoken. Before rupturing following the arrest of six employees in late June 2019, the scam corralled $2 billion in various cryptocurrency deposits.&nbsp; The majority of these deposits were in bitcoin &mdash; some 180,000 BTC or roughly 1 percent of the outstanding supply. Some of these funds were paid back out to token holders to keep up appearances, and Chainalysis was able to trace the movements of 70,000 BTC that was confirmed stolen by police reports shared by Primitive Ventures partner Dovey Wan. PlusToken&rsquo;s remaining team has apparently spent the second half of 2019 mixing these coins and liquidating them via OTC desks through Huobi, Chainalysis claimed. When asked how the blockchain analytics firm was able to trace the coins after they had been mixed, Chainalysis economist Kim Grauer said that the scammers&rsquo; mixing (or their attempt to transfer their coins to new wallets in a way that would make tracing their origin nearly impossible) was sloppy. &ldquo;They didn&rsquo;t mix properly,&rdquo; she told Bitcoin Magazine, adding that a couple of mixers were used, namely self-mixers and Wasabi wallet. Playing it on the safe side, Chainalysis was able to fully verify some 45,000 mixed coins out of the 70,000 attributed to the PlusToken team. This corroborates findings by independent and anonymous researcher ErgoBTC, though they identified 54,000 mixed coins in total. These coins were shuffled between August and September 2019, ErgoBTC argued in an October 2019 blog post. Roughly 19,000 of these bitcoin were mixed using CoinJoin through Wasabi, and another 35,000 were &ldquo;self-shuffled,&rdquo; per the post. This self-shuffle was highly insufficient for obfuscating the funds, ErgoBTC concluded, partly because the scammers reused addresses. And the Wasabi wallet mixing wasn&rsquo;t up to snuff, either, partly because they reused addresses again and partly because of other patterns in mixing behavior (such as sending BTC to Wasabi mixers in chunks of 10 to 25).&nbsp; They also noted that the scammers were likely running multiple Wasabi clients to mix with themselves; this would essentially amount to a Sybil attack in which the PlusToken team assumed the majority of mixing volume on Wasabi and had to mix with themselves. OTC Laundering. Most of these mixed coins have ended up on Huobi, and they&rsquo;re being sent to accounts associated with OTC desks, Chainalysis claimed. Source: Chainalysis Grauer told us that Chainalysis has linked the Huobi addresses to OTC brokers &ldquo;from years of investigators building up profiles&rdquo; on these firms. Many of them, she continued, have low KYC requirements, something that causes a clear gap in compliance and regulation.&nbsp; These low-KYC desks often accept bitcoin at a discount &mdash; this amounts to a premium for buying up tainted, stolen or, in this case, scammed coins. They will then flip these coins on the market or sell them again to another OTC desk, which charges another premium. &ldquo;We see a lot of whirling around in this OTC world,&rdquo; Grauer said, referring to how the firms play &ldquo;hot potato&rdquo; with dirty bitcoin to launder it. When I asked whether or not Huobi knows this is happening &mdash; or if it plays matchmaker for these unscrupulous market makers, who Grauer said provide &ldquo;so much liquidity&rdquo; for the exchange &mdash; she didn&rsquo;t make any judgments. &ldquo;We don&rsquo;t know exactly what&rsquo;s going on with Huobi &mdash; what&rsquo;s allowing [this] to happen. We can only see what&rsquo;s on the blockchain,&rdquo; she said.&nbsp; Chainalysis has tried to contact Huobi to no avail; Bitcoin Magazine also sent Huobi a request for comment but did not receive a reply as of the time of this writing. Grauer didn&rsquo;t know how the OTC desks were paying out the PlusToken scammers, whether it be in cash, bank wires, puppet bank accounts or in USDT, though Chainalysis found that the team did trade some BTC for USDT directly on Huobi through accounts unrelated to the OTC desks. Plus Equals Minus? Chainalysis&rsquo;s months-long research concluded with the hypothesis that bitcoin&rsquo;s recent price declines coincide with an influx of bitcoin flows from the PlusToken scammers to OTC accounts on Huobi. &ldquo;&hellip; spikes in on-chain flow to OTC brokers correlate with drops in Bitcoin&rsquo;s price,&rdquo; the Chainalysis report emphasized.&nbsp; The post also made particular note of a September 20, 2019, transaction of $34 million that was followed by a roughly $2,000 drop in the bitcoin price from $10,000 to $8,000 from September 24 to 26, 2019. It found that PlusToken had cashed out roughly 25,000 BTC (about $165,000,000 at today&rsquo;s valuation) since August 2019 and has another 20,000 BTC (roughly $130,000,000 at the time of writing) waiting on the sidelines. This correlation doesn&rsquo;t prove that PlusToken is causing the price to decline, Chainalysis admits. However, it ran a regression analysis to check bitcoin&rsquo;s average 40-minute volatility against movements to the OTC accounts, and it found a &ldquo;statistically significant relationship between PlusToken transfers to Huobi OTC brokers and Bitcoin price volatility for the period of time between September 23rd and 28th.&rdquo; Source: Chainalysis As with the example of the $2,000 price drop, this relies on analysis of a singular price event within a single, multi-day window. John Jeffries, the chief financial analyst at blockchain analytics company CipherTrace, agreed that the scammers are cashing out on Huobi but believes &ldquo;it has nothing to do with the current BTC price action.&rdquo; Chainalysis ultimately thinks it&rsquo;s impossible to tell for sure, but it still believes that PlusToken&rsquo;s selling has impacted overall price volatility to some degree. &ldquo;Unfortunately, because it&rsquo;s not possible to distinguish between trades made by OTC brokers in possession of PlusToken funds and all other trades made on Huobi, we can&rsquo;t say for sure that PlusToken cashouts caused Bitcoin&rsquo;s price to drop,&rdquo; per the Chainalysis blog post. &ldquo;However, we can say that those cashouts cause increased volatility in Bitcoin&rsquo;s price, and that they correlate significantly with Bitcoin price drops.&rdquo; Coin Metrics co-founder Nic Carter commented that he finds Chainalysis&rsquo;s general analysis &ldquo;persuasive,&rdquo; and he said that he wouldn&rsquo;t be surprised if PlusToken helped to inflate 2019&rsquo;s mini-bubble. &ldquo;I do think it&#039;s plausible,&rdquo; he told Bitcoin Magazine. &ldquo;I think the converse is also likely true, that PlusToken scooping up huge fractions of supply in the first half of 2019 was one of the main reasons we shot up to $14,000.&rdquo;&nbsp; He also thinks that Chainalysis is &ldquo;lowballing [its] figure&rdquo; for how much has been liquidated &ldquo;out of prudence or incomplete data.&rdquo;&nbsp;&nbsp; Grauer mentioned in our conversation that some of the coins Chainalysis was following got lost in the mixing process, so they were left out of the final findings. Shadow Brokers. Whether or not PlusToken&rsquo;s cashing out is crashing the market, Grauer believes that the OTC web of liquidity (much of which is from dirty funds) exposes a serious gulf in the current regulation and compliance landscape for the mainly Chinese and Southeast Asian OTC desks. It also offers a glimpse into how this underground band of OTC desks is providing criminals with liquidity in the shadows of the financial system. &ldquo;Anecdotally, we&rsquo;ve been honed in on this laundering infrastructure of people who move stolen and scammed money and they have a process,&rdquo; Grauer said.&nbsp; If Bitcoin is the cyber wild west, then these OTC desks are like fences &mdash; black-market merchants who buy stolen goods at a discount and resell or trade them.&nbsp; Huobi probably doesn&rsquo;t audit these OTC desks&rsquo; customers or their KYC requirements, Grauer assumes, and she said that there&rsquo;s generally a lot of regulatory ambiguity over what these KYC requirements should be. Moreover, there&rsquo;s little to no transparency into the order books of these market makers for their trades via Huobi. These missing pieces leave even the most determined blockchain analyses with a puzzling picture of how this dark liquidity affects bitcoin&rsquo;s market and spot price. The role of these &ldquo;usual suspects,&rdquo; as Grauer calls them, in Bitcoin&rsquo;s shadow markets is up for debate, but events like PlusToken&rsquo;s attempt to obfuscate its movements give researchers the ability to shine a little light on them. Still, questions about their direct impact on market dynamics will take a long time to answer.

Colin is an associate editor and staff writer for Bitcoin Magazine. He's proud to call Nashville his home, where he spends his days shouting at peddle taverns and trying to find affordable parking downtown. If it wasn't already obvious, he holds bitcoin.

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Tracing China’s $3 billion crypto scam.

How PlusToken Scam Got 1 Percent of the Bitcoin Supply - Bitcoin Magazine

https://bitcoinmagazine.com/articles/how-the-plustoken-scam-absconded-with-over-1-percent-of-the-bitcoin-supply/project_-_sketch_1_202

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China

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On June 27, 2019, a handful of leaders for a wildly popular ponzi scheme that spread across Asia were <a href="https://www.scmp.com/news/asia/australasia/article/3016604/six-chinese-nationals-wanted-beijing-internet-scam-arrested">arrested by Chinese authorities</a> after they managed to fleece unwitting customers out of roughly $3 billion.&nbsp;



<a href="https://plustoken.asia/business/">PlusToken</a>, as it was called, promised its “investors” monthly returns of anywhere from 10 to 30 percent in its <a href="https://www.coingecko.com/en/coins/plustoken/usd#panel">eponymous token (PLUS)</a>, which traded on such popular exchanges as Huobi and Bithumb. This attracted more than 200,000 bitcoin (1 percent of the outstanding supply, or the entirety of the <a href="https://www.businessinsider.com/winklevoss-twins-cut-up-key-to-protect-their-bitcoin-fortune-2017-12">Winklevi’s bitcoin holdings</a>), 789,000 ether and 26 million EOS. As of this report, the ringleader of the operation is still at large and funds are still on the move.



<div class="wp-block-image"><figure class="aligncenter"><img src="https://lh4.googleusercontent.com/nkD4fXmCnDkVlNo3NIlBl7cfzNmOCRgGjFUMGX4GR8_dBLQ4gJrRs347d74jCJeYTdJ1ts0PUhmKhv5bh8o-DqKzFQ3ER69qB6UXWl_1Oqe9olOeb8fo6vovP660zoV_sXXNrQeQ" alt=""/><figcaption>Mugshots of the six arrested team members.</figcaption></figure></div>



The racket reeks of the same chicanery and unrealistic promises of returns as the Ponzi scheme tied to now-defunct <a href="https://bitcoinmagazine.com/articles/bitconnects-alleged-ringleader-arrested-india-local-reports">BitConnect</a>, though to a drastically escalated scale. At its peak, BitConnect was only worth just north of $121 million. PlusToken, trading publicly across a number of popular Chinese exchanges, achieved a $17 billion valuation. With an all-time high of $340 a token, this would have made it the third-largest asset on CoinMarketCap if it were listed.



So how did PlusToken swindle even more people than BitConnect did, and where did all the money go now that the founders are facing legal consequences?



<h3>Anatomy of a Scam</h3>



“The first mention of PlusToken in my WeChat groups is July 2, 2018,” one source, whom we’ll refer to as “Tiresias” in this article out of respect for their anonymity, told Bitcoin Magazine. While the scam would be active for nearly a year before the arrest of its primary architects on the Pacific island of Vanuatu, the apparent homebase of the operation, Primitive Venture Co-Founder Dovey Wan told us that its peak operating time was March through June 2019.



Wan, who acts as an informational bridge between the space’s Eastern and Western communities and who brought the PlusToken situation to light on Twitter, mentioned that PlusToken holders began complaining that they couldn’t withdraw funds in the days following the Vanuatu arrests, as rumors began to spread that the organization was exit scamming. PlusToken’s remaining team attempted to quiet these talks by saying that the withdrawal issues were due to a hacking attempt.



The rumors, however, turned out to be true. Even as its primary orchestrators were in the custody of Chinese authorities, other PlusToken conspirators were busy fragmenting deposited funds into various wallet addresses, and the scheme’s alleged orchestrator, who goes by Leo, is still at large. Some of PlusTokens’s sullied warchest may have been offloaded onto exchanges for liquidation, though blockchain analytics firms have presented conflicting data on this front.



Much of PlusToken’s community, Wan stressed, is not comprised of typical cryptocurrency investors. Many of them were so easily duped because they are average citizens who knew little to nothing about bitcoin, let alone the altcoins in its orbit. PlusToken’s team even “educated” these unsuspecting investors on how they could buy bitcoin, ether and eos to contribute to the scam.&nbsp;



Tiresias told us that the scheme was widely advertised through WeChat, mainland China’s most popular messaging app. But, amazingly enough, its advertising wasn’t just limited to digital platforms. PlusToken hosted meet-ups (so called “salons”) to promote the scam and in-person training sessions for PlusToken users to teach them how to promote the platform to potential new users — they even advertised in grocery stores. One video shared with Bitcoin Magazine depicts hundreds of people congregated in an opulent auditorium swept by rave lights and punctuated with a background of K-pop music. In another, a young man holding flyers, his back strapped with a billboard blazoning PlusToken information, shoos away the person recording the footage.



<div class="wp-block-image"><figure class="aligncenter"><img src="https://lh4.googleusercontent.com/uE62qzQ2uWCw-_Kt7c934WSLFsstVSOe-9mxM2hoTkBxelsL9t2AehKac6FhOdiJqoSJUe7-eiVzaCGRXD0pKAMhT4CynJ2EJqZfUX0pY9kh7e7qNH5X5LGYUZv_D2s5HWeWAGsB" alt=""/><figcaption>A PlusToken advertisement resting on a bed of edamame in a Chinese grocery store.</figcaption></figure></div>



It’s with these brazen market tactics that PlusToken defrauded an estimated 3 million people, according to PlusToken’s advertised user base (Blockchain analytics firm CipherTrace believes this number could even be as high as 4 million). While the six individuals arrested in Vanuatu were Chinese, the scam proliferated among retail investor circles in South Korea and Japan as well, along with many other countries in Southeast Asia. Wan <a href="https://twitter.com/DoveyWan/status/1163129141752766466">claims</a> to have even received direct messages from affected users from Russia, Ukraine, Germany and as far as Canada.



PlusToken also featured a sophisticated app, which allowed its users to instantly convert Chinese yen into bitcoin, ethereum, eos, doge, litecoin and other altcoins, which they could, in turn, convert to PLUS. Proportional to their original investment and how many new users they onboarded to the scheme, users were paid out exclusively in PLUS tokens. PLUS users could graduate to multiple echelons based on their promotional activity, such as the highly-sought-after “Big Boy” and “Great God” distinctions.



<div class="wp-block-image"><figure class="aligncenter"><img src="https://lh5.googleusercontent.com/1Ia6SmughvFYYwznAeEPhOUHHwU2E45nYXWhg5G5CwKjNiYP3Yz5Wv-AptRGIi6ZU50iUvy1nrifizFmAFQEacUK3S8xwj4HymNUKP0gsJLIMDifNSNPvUxk5mycHg0mCV65Trm4" alt=""/><figcaption>PlusToken app dashboard.</figcaption></figure></div>



Most of the scheme’s early members received “their dividend as promised, but not the later investors,” Jeff Liu, head of U.S. operations for blockchain security company <a href="https://peckshield.com/">PeckShield</a>, told Bitcoin Magazine.&nbsp;



But even those investors who did receive PlusToken dividends were ultimately scammed, as these tokens are, much like BitConnect’s own, worthless and offer nothing in the way of financial remuneration for the 3 to 4 million investors affected.&nbsp;



<h3>Where Are the Funds?</h3>



Over the course of its lifetime, PlusToken garnered investments of 200,000 bitcoin, 789,000 ether and 26 million eos, all of which were held in wallets the PlusToken team controls. A report released by the Prosecutor General’s office of Yancheng District <a href="https://twitter.com/DoveyWan/status/1162776501218971648/photo/1">says</a> that “the flow and movements of funds are unclear, which is still under further investigation,” likely indicating that hardware and private keys were not seized during the arrest in Vanuatu.&nbsp;



All of the team’s ether spoils are still stowed in its Ethereum <a href="https://etherscan.io/address/0xf4a2eff88a408ff4c4550148151c33c93442619e">wallet</a>, as are its EOS <a href="https://bloks.io/account/eospstotoken">holdings</a>. Funds from their bitcoin wallet, however, have been on the move — though blockchain analytics experts disagree as to how much is headed where.



“From [PeckShield’s] data, at least 1,000-plus BTC <a href="https://twitter.com/DoveyWan/status/1162348315570135040">were moved to exchanges</a> and liquidated, but the actual figure could be much larger,” Liu told Bitcoin Magazine. The exchanges in question are Huobi Global and Bittrex, according to the analysis, and the team has been allegedly dumping its hoard of bitcoin on them since July 2019. Research by another firm, <a href="https://cryptoquant.com/home/">CryptoQuant</a>, alleges that over 39,000 bitcoin has also passed through Kraken, Bitstamp, Brazilian exchange Mercado Bitcoin and Bitcoin Mixer.



<div class="wp-block-image"><figure class="aligncenter"><img src="https://lh3.googleusercontent.com/ovs4wNj8DqQMHhPEQlxO-PBvx6mmvWpuH6kjqC1D5HjopE2W1S1hyFPY3fivX3tAgCeSfNPAO9qrRosNo5uB6i4cgR20e_SOpjAsXkNwS4PE6S-fT4FGvmI5wzLkR39wtT917nan" alt=""/><figcaption><a href="https://twitter.com/DoveyWan/status/1162348315570135040/photo/1">PeckShield’s visualization</a> of fund movements.</figcaption></figure></div>



<a href="https://twitter.com/danlevine/status/1162092273464745984">Another independent community member</a> claims that the team is also sending bitcoin to Binance, though this has not been verified. And, according to North American blockchain analytics company <a href="https://ciphertrace.com/">CipherTrace</a>, neither has PeckShield’s findings. CipherTrace told Bitcoin Magazine that it could not completely confirm that PlusToken has exit scammed in the traditional meaning of the term, nor could it confirm how many funds were involved in the fraud.



“This is unlike other exit scams where the insiders clearly made off with the funds — if there was $3 billion in crypto at the time of the collapse, it is not clear whose pockets it is now in,” CipherTrace’s director of financial investigations and education, Pamela Garner, told Bitcoin Magazine, adding that the raid on Vanuatu should have ended in law enforcement capturing hardware along with personnel (though, per the Yangcheng police report, it did not).



CipherTrace also found no evidence that the PlusToken team has been dumping its filched supply on exchanges. PeckShield and others that have been tracking funds have argued that PlusToken’s offloading of funds <a href="https://bitcoinmagazine.com/articles/did-the-plustoken-scam-cause-a-bitcoin-price-dip">has contributed</a> to bitcoin’s recent price decline. CipherTrace doesn’t believe this is the case. The company has tracked April transactions of 95,228; 15,000; and 68,562 bitcoin to various address, though the most recent movement of 22,922 bitcoin on August 13, 2019, which was broken up into several addresses, did not make it to exchanges, according to CipherTrace.



“The recent movements (of a few days ago) have not gone into any exchanges or made any attempts to dump the bitcoin into the market,” Garner said. “The August 13 movements went into private, single-use holding addresses. They have been sitting there for a few days. They have not been pushed to the market. That’s not dumping BTC. It could be a theft of some sort. Or an early attempt to obfuscate funds or movement.”&nbsp;



<a href="https://t.co/Z1pBPDBQXc?amp=1">TokenAnalyst</a>, another blockchain analytics firm, <a href="https://twitter.com/thetokenanalyst/status/1162045656241979392">corroborated</a> CipherTrace’s findings.



The discrepancy between CipherTrace and PeckShield’s analysis stems from the fact that CipherTrace “hasn’t independently verified Dovey Wan's claims that these specific addresses belong to Plus Token,” according to the company. Wan claims that the following addresses were advertised on WeChat to newcomers:14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm, 31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV, 33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF. Bitcoin Magazine was able to independently verify that at least one of these three bitcoin addresses is attributed to PlusToken, along with its Ethereum and EOS addresses.



Still, PeckShield, a Chinese company, is holding firm to its analysis. Such analysis, it told Bitcoin Magazine, will be crucial for recouping filched funds, some of which Liu claims have already been recovered (Bitcoin Magazine could not verify this information).



“The stolen fund can be intercepted by exchanges if they are moved in there and the exchanges are willing to do so,” Liu said. “PeckShield has worked with our customers to track and recover stolen funds before in similar ways. For this incident, to my knowledge, the Chinese law enforcement agencies are working on recovering the fund, and at least some of funds have been confiscated by the Chinese government agencies.”



<h3>How Did We Get Here?</h3>



Inherent in the discrepancies between PeckShield’s analysis and CipherTrace’s own is the gulf of information that exists between the Eastern and Western cryptocurrency communities — the same that made the West deaf to a multi-billion dollar scam that has been a hot topic in Chinese media for over a month. As we’ve learned over the years from the seemingly eternal false news reports of China banning bitcoin, reliable information has a hard time crossing the Atlantic.&nbsp;



The case also quantifies a crucial difference between the investing climates on the two spheres. Multi-level marketing schemes like this one are an all-too-common plague in Chinese retail investor scenes, Wan told Bitcoin Magazine. China has enjoyed an explosion of wealth creation in recent decades, so Chinese citizens used to quick capital growth and wealth accumulation “are less sensitive to this type of Ponzi when they front as ‘high-yield investments,’” Wan said.



This environment has bred plenty of unscrupulous activity, both within the cryptocurrency industry and outside of it. Wan says there are still <a href="https://twitter.com/DoveyWan/status/1162382406885580800">other cryptocurrency Ponzi schemes</a> out to swindle unaware investors. One of these that she pointed to, VDS, has a market cap of $1 billion.



These efforts only harm the cryptocurrency industry, Wan opined, stating that bitcoin is still largely identified with scammy activity in the country. The answer, then, is education and awareness. If retail investors are armed with the knowledge of how to spot these schemes, then they can combat against them.



Until such upstream measures make a difference, however, downstream measures, like action by law enforcement, will have to do for now. This could also mean damming up liquidity ramps so that the scammers cannot cash out of their holdings, or, assuming the funds are on exchanges to begin with, seizing the related accounts to redistribute their holdings to PlusToken’s victims.

Tracing China&rsquo;s $3 billion bitcoin scam, PlusToken, and how it absconded with 200,000 bitcoin and 789,000 ether and 26 million EOS.

How PlusToken Got 1 Percent of the Bitcoin Supply &raquo; Bitcoin Magazine

On June 27, 2019, a handful of leaders for a wildly popular ponzi scheme that spread across Asia were arrested by Chinese authorities after they managed to fleece unwitting customers out of roughly $3 billion.&nbsp; PlusToken, as it was called, promised its &ldquo;investors&rdquo; monthly returns of anywhere from 10 to 30 percent in its eponymous token (PLUS), which traded on such popular exchanges as Huobi and Bithumb. This attracted more than 200,000 bitcoin (1 percent of the outstanding supply, or the entirety of the Winklevi&rsquo;s bitcoin holdings), 789,000 ether and 26 million EOS. As of this report, the ringleader of the operation is still at large and funds are still on the move. Mugshots of the six arrested team members. The racket reeks of the same chicanery and unrealistic promises of returns as the Ponzi scheme tied to now-defunct BitConnect, though to a drastically escalated scale. At its peak, BitConnect was only worth just north of $121 million. PlusToken, trading publicly across a number of popular Chinese exchanges, achieved a $17 billion valuation. With an all-time high of $340 a token, this would have made it the third-largest asset on CoinMarketCap if it were listed. So how did PlusToken swindle even more people than BitConnect did, and where did all the money go now that the founders are facing legal consequences? Anatomy of a Scam. &ldquo;The first mention of PlusToken in my WeChat groups is July 2, 2018,&rdquo; one source, whom we&rsquo;ll refer to as &ldquo;Tiresias&rdquo; in this article out of respect for their anonymity, told Bitcoin Magazine. While the scam would be active for nearly a year before the arrest of its primary architects on the Pacific island of Vanuatu, the apparent homebase of the operation, Primitive Venture Co-Founder Dovey Wan told us that its peak operating time was March through June 2019. Wan, who acts as an informational bridge between the space&rsquo;s Eastern and Western communities and who brought the PlusToken situation to light on Twitter, mentioned that PlusToken holders began complaining that they couldn&rsquo;t withdraw funds in the days following the Vanuatu arrests, as rumors began to spread that the organization was exit scamming. PlusToken&rsquo;s remaining team attempted to quiet these talks by saying that the withdrawal issues were due to a hacking attempt. The rumors, however, turned out to be true. Even as its primary orchestrators were in the custody of Chinese authorities, other PlusToken conspirators were busy fragmenting deposited funds into various wallet addresses, and the scheme&rsquo;s alleged orchestrator, who goes by Leo, is still at large. Some of PlusTokens&rsquo;s sullied warchest may have been offloaded onto exchanges for liquidation, though blockchain analytics firms have presented conflicting data on this front. Much of PlusToken&rsquo;s community, Wan stressed, is not comprised of typical cryptocurrency investors. Many of them were so easily duped because they are average citizens who knew little to nothing about bitcoin, let alone the altcoins in its orbit. PlusToken&rsquo;s team even &ldquo;educated&rdquo; these unsuspecting investors on how they could buy bitcoin, ether and eos to contribute to the scam.&nbsp; Tiresias told us that the scheme was widely advertised through WeChat, mainland China&rsquo;s most popular messaging app. But, amazingly enough, its advertising wasn&rsquo;t just limited to digital platforms. PlusToken hosted meet-ups (so called &ldquo;salons&rdquo;) to promote the scam and in-person training sessions for PlusToken users to teach them how to promote the platform to potential new users &mdash; they even advertised in grocery stores. One video shared with Bitcoin Magazine depicts hundreds of people congregated in an opulent auditorium swept by rave lights and punctuated with a background of K-pop music. In another, a young man holding flyers, his back strapped with a billboard blazoning PlusToken information, shoos away the person recording the footage. A PlusToken advertisement resting on a bed of edamame in a Chinese grocery store. It&rsquo;s with these brazen market tactics that PlusToken defrauded an estimated 3 million people, according to PlusToken&rsquo;s advertised user base (Blockchain analytics firm CipherTrace believes this number could even be as high as 4 million). While the six individuals arrested in Vanuatu were Chinese, the scam proliferated among retail investor circles in South Korea and Japan as well, along with many other countries in Southeast Asia. Wan claims to have even received direct messages from affected users from Russia, Ukraine, Germany and as far as Canada. PlusToken also featured a sophisticated app, which allowed its users to instantly convert Chinese yen into bitcoin, ethereum, eos, doge, litecoin and other altcoins, which they could, in turn, convert to PLUS. Proportional to their original investment and how many new users they onboarded to the scheme, users were paid out exclusively in PLUS tokens. PLUS users could graduate to multiple echelons based on their promotional activity, such as the highly-sought-after &ldquo;Big Boy&rdquo; and &ldquo;Great God&rdquo; distinctions. PlusToken app dashboard. Most of the scheme&rsquo;s early members received &ldquo;their dividend as promised, but not the later investors,&rdquo; Jeff Liu, head of U.S. operations for blockchain security company PeckShield, told Bitcoin Magazine.&nbsp; But even those investors who did receive PlusToken dividends were ultimately scammed, as these tokens are, much like BitConnect&rsquo;s own, worthless and offer nothing in the way of financial remuneration for the 3 to 4 million investors affected.&nbsp; Where Are the Funds? Over the course of its lifetime, PlusToken garnered investments of 200,000 bitcoin, 789,000 ether and 26 million eos, all of which were held in wallets the PlusToken team controls. A report released by the Prosecutor General&rsquo;s office of Yancheng District says that &ldquo;the flow and movements of funds are unclear, which is still under further investigation,&rdquo; likely indicating that hardware and private keys were not seized during the arrest in Vanuatu.&nbsp; All of the team&rsquo;s ether spoils are still stowed in its Ethereum wallet, as are its EOS holdings. Funds from their bitcoin wallet, however, have been on the move &mdash; though blockchain analytics experts disagree as to how much is headed where. &ldquo;From [PeckShield&rsquo;s] data, at least 1,000-plus BTC were moved to exchanges and liquidated, but the actual figure could be much larger,&rdquo; Liu told Bitcoin Magazine. The exchanges in question are Huobi Global and Bittrex, according to the analysis, and the team has been allegedly dumping its hoard of bitcoin on them since July 2019. Research by another firm, CryptoQuant, alleges that over 39,000 bitcoin has also passed through Kraken, Bitstamp, Brazilian exchange Mercado Bitcoin and Bitcoin Mixer. PeckShield&rsquo;s visualization of fund movements. Another independent community member claims that the team is also sending bitcoin to Binance, though this has not been verified. And, according to North American blockchain analytics company CipherTrace, neither has PeckShield&rsquo;s findings. CipherTrace told Bitcoin Magazine that it could not completely confirm that PlusToken has exit scammed in the traditional meaning of the term, nor could it confirm how many funds were involved in the fraud. &ldquo;This is unlike other exit scams where the insiders clearly made off with the funds &mdash; if there was $3 billion in crypto at the time of the collapse, it is not clear whose pockets it is now in,&rdquo; CipherTrace&rsquo;s director of financial investigations and education, Pamela Garner, told Bitcoin Magazine, adding that the raid on Vanuatu should have ended in law enforcement capturing hardware along with personnel (though, per the Yangcheng police report, it did not). CipherTrace also found no evidence that the PlusToken team has been dumping its filched supply on exchanges. PeckShield and others that have been tracking funds have argued that PlusToken&rsquo;s offloading of funds has contributed to bitcoin&rsquo;s recent price decline. CipherTrace doesn&rsquo;t believe this is the case. The company has tracked April transactions of 95,228; 15,000; and 68,562 bitcoin to various address, though the most recent movement of 22,922 bitcoin on August 13, 2019, which was broken up into several addresses, did not make it to exchanges, according to CipherTrace. &ldquo;The recent movements (of a few days ago) have not gone into any exchanges or made any attempts to dump the bitcoin into the market,&rdquo; Garner said. &ldquo;The August 13 movements went into private, single-use holding addresses. They have been sitting there for a few days. They have not been pushed to the market. That&rsquo;s not dumping BTC. It could be a theft of some sort. Or an early attempt to obfuscate funds or movement.&rdquo;&nbsp; TokenAnalyst, another blockchain analytics firm, corroborated CipherTrace&rsquo;s findings. The discrepancy between CipherTrace and PeckShield&rsquo;s analysis stems from the fact that CipherTrace &ldquo;hasn&rsquo;t independently verified Dovey Wan&#039;s claims that these specific addresses belong to Plus Token,&rdquo; according to the company. Wan claims that the following addresses were advertised on WeChat to newcomers:14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm, 31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV, 33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF. Bitcoin Magazine was able to independently verify that at least one of these three bitcoin addresses is attributed to PlusToken, along with its Ethereum and EOS addresses. Still, PeckShield, a Chinese company, is holding firm to its analysis. Such analysis, it told Bitcoin Magazine, will be crucial for recouping filched funds, some of which Liu claims have already been recovered (Bitcoin Magazine could not verify this information). &ldquo;The stolen fund can be intercepted by exchanges if they are moved in there and the exchanges are willing to do so,&rdquo; Liu said. &ldquo;PeckShield has worked with our customers to track and recover stolen funds before in similar ways. For this incident, to my knowledge, the Chinese law enforcement agencies are working on recovering the fund, and at least some of funds have been...

Tracing China’s $3 billion bitcoin scam, PlusToken, and how it absconded with 200,000 bitcoin and 789,000 ether and 26 million EOS.

How PlusToken Got 1 Percent of the Bitcoin Supply

https://bitcoinmagazine.com/articles/how-the-plustoken-scam-absconded-with-over-1-percent-of-the-bitcoin-supply

The PlusToken cryptocurrency scam, thought to involve the theft of over 200,000 BTC, has involved a significant sell-off as the scammers try to cover their tracks.

Did the PlusToken Scam Cause a Bitcoin Price Dip? - Bitcoin Magazine

https://bitcoinmagazine.com/articles/did-the-plustoken-scam-cause-a-bitcoin-price-dip/project_-_sketch_1_185-2

https://admin.bitcoinmagazine.com/wp-content/uploads/2019/08/Project_-_Sketch_1_185-1.jpg

Bitcoin price

Scam

200,000 btc

addresses

btc received

chinese cryptocurrency

cryptocurrency

cryptocurrency exchanges

different addresses

This article was originally published by <a href="https://news.8btc.com/bitcoin-dip-allegedly-a-result-of-incessant-bitcoin-selloffs-from-3-billion-ponzi-scheme">8btc</a> and written by <a href="https://news.8btc.com/author/lylian">Lylian Teng</a>.



Bitcoin’s recent dip under the $10,000 mark is alleged to be directly related to the incessant bitcoin sell-off caused by a $3 billion Chinese Ponzi scheme, and the dump may continue.



The scam project, dubbed <a href="https://news.8btc.com/crypto-wallet-plustoken-a-3-billion-ponzi-scheme-went-bust">PlusToken</a>, went bust early in July 2019 after Chinese police arrested a core team member of the scheme who had escaped to Vanuatu at that time. Identified as one of the largest Ponzi schemes in the cryptocurrency space, PlusToken made off with over 200,000 BTC, 800,000 ETH and 26 million EOS, for a total of around $3 billion.



For example, here are three confirmed BTC wallet addresses tied to the PlusToken scam and the amount of BTC in each:



<ol><li><a href="https://btc.com/14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm">14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm</a> (Total 95,288 BTC received)</li><li><a href="https://btc.com/31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV">31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV</a> (Total 68,562 BTC received)</li><li><a href="https://btc.com/33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF">33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF</a> (Total 37,922 BTC received)</li></ol>



The cryptocurrency obtained in the scam has not been recovered as the people who hold the keys to these wallets have not been caught, and authorities cannot access them.



PlusToken wallets monitored by crypto security firm PeckShield have been detected moving the fraudulent funds into many different addresses, including some cryptocurrency exchanges, since early July 2019. Over the past few days, 5,775 BTC was found to be moved in relatively small batches (about 50 to 200 BTC per batch) into many different addresses (making it easier to send these funds to exchanges).



<h4>Slumping Bitcoin Price</h4>



In the meantime, a chat screenshot circulating among Chinese traders claims that the latest downturn in the cryptocurrency market seems to be a result of mass sell-offs from PlusToken, who has been dumping the scammed 200,000 BTC, 100 BTC at a time, incessantly for five days on the cryptocurrency exchange Binance.



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/xNqbDNnMOt1D5OXcoC5DZHXpDaM2txCRkt_bdEGC0kDxIFrnk8dHUZsw_FgaH7zBp1jHt8owdWep7pGlBFRTq5iw51hbTgfJVjGtXTnT2UJZS3G3p97DANUexjwthE4eV7ybU9UD" alt="1"/></figure>



According to the chat, the bitcoin price slump began to ease somewhat simply because the dump stopped during <a href="https://www.binance.com/en/support/articles/360032315391">Binance’s system upgrade</a>. The chat also surmised that the scammers chose to dump the ill-gotten cryptocurrency on Binance because frequent over-the-counter (OTC) trading on Huobi and OKEx (the Chinese cryptocurrency exchanges favored by most Chinese cryptocurrency traders) would trigger alarms and lead to accounts being frozen.



In an effort to curb the impact of such sell-offs on the crypto market, Dovey Wan — founding partner of crypto investment fund Primitive Ventures — asked security firms to keep a closer eye on whether the scam’s perpetrators are moving more funds into exchanges and called on exchanges and OTC platforms to blacklist those wallet addresses.



<figure class="wp-block-embed-twitter wp-block-embed is-type-rich is-provider-twitter"><div class="wp-block-embed__wrapper">
https://twitter.com/DoveyWan/status/1161696977609879552?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1161703117835997185&amp;ref_url=https%3A%2F%2Fnews.8btc.com%2Fbitcoin-dip-allegedly-a-result-of-incessant-bitcoin-selloffs-from-3-billion-ponzi-scheme
</div></figure>



<a href="https://www.8btc.com/article/465386">PeckShield</a> also found that, on August 14, 2019, another wallet connected to PlusToken was active — around 23,000 BTC was transferred into four new addresses, with 4,922 BTC, 5,000 BTC, 6,000 BTC and 7,000 BTC being moved. However, it is still unclear whether these funds will flow into exchanges.



<figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/JCjCMlShZBIt-gbInMHiOn3Ixp5RP5qc5-Y1ESjyYzbQiAf58vgAHHrA_kZhlnUWVLtzE8hkQE_2FBIVfE2jX64ITEqDlL9wJkvp4FCaK3IyBpMv3_GXz6SjxowY1fTihQ0wXzNW" alt="2"/><figcaption> Graph showing PlusToken’s addresses and money flow in early July 2019, made by PeckShield</figcaption></figure>



<figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/HB6q-PsWOEe1WmSwy9XaWQczzCDm3kC8v5tGAwtub5foquU11MOL6tqw1ndT0zr-rpjk0RvoPlShcq9wV2QPT9WgCIFJqaMcryykmr9poYTacEPMqYAt8fUdOuisdq7efqA0ect6" alt="9"/><figcaption> Graph showing one of PlusToken’s addresses starting with “1M1Tfsvb” and fund flow on August 12, 2019, made by PeckShield</figcaption></figure>

8btc (https://news.8btc.com/) is regarded as the oldest and the most influential independent platform for bitcoin, blockchain and cryptocurrency news in the Chinese community. Its goal is to bridge the communication gap between the Chinese community and the outside world. News, policy analysis... everything you want to know about crypto in China is here.

8btc

Did the PlusToken Scam Cause a Bitcoin Price Dip?

This article was originally published by 8btc and written by Lylian Teng. Bitcoin&rsquo;s recent dip under the $10,000 mark is alleged to be directly related to the incessant bitcoin sell-off caused by a $3 billion Chinese Ponzi scheme, and the dump may continue. The scam project, dubbed PlusToken, went bust early in July 2019 after Chinese police arrested a core team member of the scheme who had escaped to Vanuatu at that time. Identified as one of the largest Ponzi schemes in the cryptocurrency space, PlusToken made off with over 200,000 BTC, 800,000 ETH and 26 million EOS, for a total of around $3 billion. For example, here are three confirmed BTC wallet addresses tied to the PlusToken scam and the amount of BTC in each: 14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm (Total 95,288 BTC received)31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV (Total 68,562 BTC received)33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF (Total 37,922 BTC received) The cryptocurrency obtained in the scam has not been recovered as the people who hold the keys to these wallets have not been caught, and authorities cannot access them. PlusToken wallets monitored by crypto security firm PeckShield have been detected moving the fraudulent funds into many different addresses, including some cryptocurrency exchanges, since early July 2019. Over the past few days, 5,775 BTC was found to be moved in relatively small batches (about 50 to 200 BTC per batch) into many different addresses (making it easier to send these funds to exchanges). Slumping Bitcoin Price. In the meantime, a chat screenshot circulating among Chinese traders claims that the latest downturn in the cryptocurrency market seems to be a result of mass sell-offs from PlusToken, who has been dumping the scammed 200,000 BTC, 100 BTC at a time, incessantly for five days on the cryptocurrency exchange Binance. According to the chat, the bitcoin price slump began to ease somewhat simply because the dump stopped during Binance&rsquo;s system upgrade. The chat also surmised that the scammers chose to dump the ill-gotten cryptocurrency on Binance because frequent over-the-counter (OTC) trading on Huobi and OKEx (the Chinese cryptocurrency exchanges favored by most Chinese cryptocurrency traders) would trigger alarms and lead to accounts being frozen. In an effort to curb the impact of such sell-offs on the crypto market, Dovey Wan &mdash; founding partner of crypto investment fund Primitive Ventures &mdash; asked security firms to keep a closer eye on whether the scam&rsquo;s perpetrators are moving more funds into exchanges and called on exchanges and OTC platforms to blacklist those wallet addresses. https://twitter.com/DoveyWan/status/1161696977609879552?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1161703117835997185&amp;ref_url=https%3A%2F%2Fnews.8btc.com%2Fbitcoin-dip-allegedly-a-result-of-incessant-bitcoin-selloffs-from-3-billion-ponzi-scheme PeckShield also found that, on August 14, 2019, another wallet connected to PlusToken was active &mdash; around 23,000 BTC was transferred into four new addresses, with 4,922 BTC, 5,000 BTC, 6,000 BTC and 7,000 BTC being moved. However, it is still unclear whether these funds will flow into exchanges. Graph showing PlusToken&rsquo;s addresses and money flow in early July 2019, made by PeckShield Graph showing one of PlusToken&rsquo;s addresses starting with &ldquo;1M1Tfsvb&rdquo; and fund flow on August 12, 2019, made by PeckShield

https://bitcoinmagazine.com/articles/did-the-plustoken-scam-cause-a-bitcoin-price-dip

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plustoken

Chainalysis: PlusToken Is Dumping on Huobi OTCs, May Be Eating Into BTC Price

How the PlusToken Scam Absconded With Over 1 Percent of the Bitcoin Supply

Did the PlusToken Scam Cause a Bitcoin Price Dip?