Where Did the Chinese Authorities' 190,000 Bitcoins Go?
According to the reporter, the Chinese authorities have confiscated a large number of digital assets. The PlusToken team, led by a middle school educated man from Changsha, raised 310,000 Bitcoins, 9.17 million Ethereums (ETH) and more than 51 million EOS, using a simple Ponzi scheme and pyramid scheme model. The Chinese police confiscated 190,000 BTC, 830,000 ETH and 27.24 million EOS.
According to reporters, part of the confiscated cryptocurrencies were sold through Beijing Zhifan Technology Co., Ltd., similar to the U.S. company Chainalysis. But the whereabouts of the rest of the assets remain unclear.
Another source, Jiang Zhuoer, claimed that most of the confiscated BTC were sold between late 2019 and mid-2020, when the price of BTC fluctuated between $7,000 and $12,000.
But the fate of the remaining assets remains unknown. Overseas analysts who track PlusToken addresses believe that although most of the Bitcoin has been sold through the Huobi platform, there are still about 15,000 BTC to be sold. In addition, they estimate that the Ethereum address remains unchanged.
The reporter noted that there could be discrepancies between addresses confirmed by police and those recorded by foreign observers, and he also noted that police were still tracking some addresses.
What is known about PlusToken
In 2019, users of the PlusToken cryptocurrency wallet lost $3 billion after the project leader absconded with the funds. The platform was launched in 2018 and was promoted as a decentralized international project developed by a South Korean team. PlusToken targets Asian and European countries.
PlusToken offers investors guaranteed monthly payments of 6% to 19% and bonuses for attracting new participants. The company plans to register 10 million users by the end of 2019, although it claims the number of participants is 3 million.
investigation
Hunan police launched an investigation into the PlusToken Ponzi scheme in March 2019. Since then, the head of the Chinese unit, Chen Bo, and five other Chinese citizens associated with the project have been at large.
A few months after the platform was suspended, Primitive Ventures Managing Partner Dovey Wan reported that Chinese police had arrested a key suspect in the PlusToken case.
Meanwhile, auditing firm Peckshield reported that wallet funds totaling about 1,000 BTC began flowing into Bittrex and Huobi exchanges in early July.
Additionally, there are rumors among Chinese traders that someone allegedly associated with PlusToken has been leaking 100 BTC to the Binance exchange.
In July 2020, Chinese police detained 27 main suspects and 82 key participants in the PlusToken cryptocurrency pyramid scheme.
Dovey Wan confirmed the information about the arrest of PlusToken organizers. She explained that they had been wanted for 12 months. Such a long search can be explained by the fact that the key players of the pyramid are scattered in different countries, which increases the complexity of the search efforts.
First sale of confiscated assets
In November 2020, news broke that Chinese authorities had seized $4.2 billion worth of cryptocurrencies from the PlusToken financial pyramid. The government will sell these cryptocurrencies and transfer the profits to the state treasury.
At the time, it was reported that the government seized the following currencies: 195,000 BTC, 833,000 ETH, 1.4 million LTC, 27.6 million EOS, 74,000 DASH, 487 million XRP, 6 billion DOGE, 80,000 BCH, and 214,000 USDT.
China’s Cryptocurrency Landscape
China has long been the flagship and driving force of the cryptocurrency industry. When it comes to mining, China competes on equal terms with the rest of the world, providing a significant portion of the total hash rate for the leading cryptocurrency networks. China has also established a large-scale production base for mining equipment. But everything changed in 2021, when the People's Bank of China declared any cryptocurrency-related activities illegal.
The websites of cryptocurrency exchanges and many internet resources dedicated to cryptocurrencies were banned. In addition, the regulator explicitly admitted that stablecoins such as Tether, Bitcoin and Ethereum are not legal tender, in order to avoid ambiguity. A few years ago, in 2017, Chinese officials successfully banned ICOs, explaining that companies conducting ICOs could violate financial regulations.
However, according to the latest data provided by CCAF experts, mainland China's share of the global hash rate is 21.11%. That is, it is only 10% less than the data in June 2021. This is the case despite the fact that cryptocurrency mining has been completely banned.
The largest companies producing mining equipment are also located in China. First of all, there are Bitmain and Antminer series equipment, as well as MicroBT from WhatsMiner and miners from Innosilicon, AGM, Canaan and Ebang.
Therefore, despite all the current bans, China remains one of the most critical players in the cryptocurrency space, even though it pretends to be an invisible shadow.
