Author: Revc, Golden Finance
1. Introduction
The crypto market sentiment has not yet recovered from the plunge on August 6, but a piece of news about Plustoken on August 7 once again touched the sensitive nerves of the crypto market.
According to Lookonchain's monitoring, hundreds of wallets that have been dormant for 3.3 years have begun to transfer large amounts of Ethereum (ETH), possibly involving 789,533 ETH, or about $2 billion. On-chain tracking shows that the funds came from a wallet called "Plus Token Ponzi 2". The wallet dispersed 789,533 ETH into thousands of wallets in 2020 and has not been active since April 2021.
According to on-chain analyst Ember’s monitoring, most of the Plustoken-related wallets have been sold in 2021, and only 25,757 ETH have been collected so far. Immediately, market sentiment was appeased.
Arkham then stated on the X platform that the Plustoken wallet was associated with dozens of wallets and that $464.7 million in ETH had been transferred in the past 12 hours alone.
2. PlusToken Event Summary
Case Background
PlusToken was launched in May 2018, claiming to be a multi-functional cross-chain decentralized wallet and "smart dog brick-moving" arbitrage platform. By promoting eye-catching slogans such as "coin king", "thousand-fold coin", and "82 times increase in 8 months", it quickly attracted a large number of investors to join. The platform uses a pyramid scheme model to invite new members through referral codes and requires a minimum of $500 in cryptocurrency as a threshold to obtain platform revenue.
Development process
May 2018: PlusToken launched
The platform attracted a large number of investors under the guise of "blockchain wallet" and "smart arbitrage". In just one year, the number of registered members reached 2.7 million, and the maximum level reached 3,293.
June 27, 2019: Withdrawal issues exposed, operations stagnated
PlusToken was unable to withdraw cash, causing panic among investors. Although the platform did not provide an official explanation, some investors still chose to trust the platform, resulting in more funds pouring in. After the platform stopped operating, Plustoken accounts still received RMB 150 million worth of cryptocurrency.
November 26, 2020: Second-instance verdict
On November 26, 2020, the Intermediate People's Court of Yancheng City, Jiangsu Province, made a second-instance judgment on the PlusToken case, ruling to confiscate the cryptocurrencies seized in the case and to turn over the funds and proceeds obtained to the state treasury in accordance with the law.
3. Where the funds go
PlusToken defrauded global investors of $2 billion to $2.9 billion in cryptocurrencies through a Ponzi scheme. The platform mainly relied on over-the-counter (OTC) channels for large-scale capital inflows and outflows, and evaded tracking through complex on-chain asset transfers and currency mixing services. Part of the funds were used to purchase real estate and luxury cars, while the rest was cashed out through the OTC market.
In June 2020, 789,500 Ethereum (ETH), worth approximately $191.9 million at the time, were transferred from a PlusToken wallet and dispersed through hundreds of intermediary wallets.
Between June and September 2021, most of the Ethereum (ETH) in Plustoken wallets was transferred to the Bidesk exchange (which closed at the end of 2021) through multiple addresses. Subsequently, these ETH were transferred from the Bidesk exchange to the Huobi exchange. The amount of ETH transferred through only four Bidesk deposit addresses reached 268,843.
Funds collected from the treasury
The total value of the cryptocurrencies involved in Plustoken exceeded RMB 15 billion. According to the ruling, law enforcement agencies seized a total of 194,775 bitcoins, 833,083 ethers, 1.4 million litecoins, 27.6 million EOS, 74,167 DASH, 487 million XRP, 6 billion DOGE, 79,581 BCH and 213,724 USDT. In the end, the organizers involved were sentenced for pyramid scheme fraud and the platform funds were confiscated according to law.
IV. Summary
The activities of Plustoken wallets continue to touch the sensitive nerves of investors and affect the recent trend of ETH. According to the analysis of on-chain data, this wallet transfer is more likely to come from the operation of the released prisoners in the case. In addition to the impact on the market, people are more concerned about the huge losses suffered by investors in the incident. Since the outbreak of the case, the price of cryptocurrencies has risen dozens of times. However, in the early stages of the crypto industry, many investors failed to keep their wealth. If the current crypto industry is compared to the gold rush era in North America, it is releasing a vast space for development and wealth growth. Investors need to ensure the safety of their assets and avoid falling into Ponzi schemes in order to enjoy the dividends of the development of the times.
