A little-known Chinese cryptocurrency Ponzi scheme might be cashing out billions of dollars, which was looted through a scam called “Plus Token” from people from China, Japan and South Korea.
Another crypto scam has recently come into the limelight when the venture capitalist Dovey Wan tweeted about Plus Token, a failed Chinese cryptocurrency. According to Wan, this China-based Plus Token is a crypto Ponzi scheme and it might be liquidating portions of a reported $3.5 billion in stolen cryptocurrency via various crypto exchanges.
As Wan tweeted, Plus Token is considered as one of the biggest Chinese Ponzi schemes in history, defrauding a total amount of around 70K Bitcoin(BTC)trade and 800K Ethereum (ETH)trade. When Wan summed up the entire haul scammed by the team of Plus Token, he got to the overwhelming number of about $3.2 billion.
As indicated by Wan, Plus Token still has control over the majority of funds in the form of cryptocurrency and it has been using crypto exchanges such as Huobi, Bittrex, and Binance to distribute the rest of the digital coins and launder the money. The alleged criminals have been splitting the digital coins into different crypto wallets which are not registered with the company and using them to withdraw the rest of the funds. Wan believes that the sell-off of the remaining virtual currency has started in July.
“A security audit firm Peckshield has done a graph analysis of the money flow from PlusToken’s wallet in early July, and figured out about total ~1000 has gone into Bitrrex and Huobi. So basically, the sells off have started around early July.”
On June 27th, 2019, Plus Token wallet users based in China, Japan, and South Korea were unable to withdraw any of their funds from their mobile wallet. The news didn’t spread like fire but caught just enough attention that Chinese law enforcement agencies arrested the team behind the Plus Token. Lather the news of them being arrested was reported by several popular media outlets including the South China Morning Post and 36KR.
Trying to find various reasons why cryptocurrency exchanges couldn’t identify the scam, Wan tweeted that crypto exchanges may be unaware of the apparent scam as Chinese authorities haven’t made it known to the public yet. Being scarcely reported, the Plus Token scam could be one of the biggest crypto scams in the history of an already fraud-fraught industry.
Scams, frauds, Ponzi schemes and other illicit activities have unfortunately become common in the crypto world. According to a report published by CipherTrace, in Q1 of 2019 alone, a whooping sum of $1.2 billion was lost to crypto scams and frauds.