Chinese Authorities Transfer 7,000 ETH, Obfuscate Previous Transactions Related To Seized PlusTokens Funds

The Chinese government recently transferred 7,000 ETH coins from seized funds of the popular PlusToken Ponzi scheme. ErgoBTC, an analyst at OXT Research, disclosed this in an October in an X post.

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The Chinese government is reportedly preparing to sell a large number of Ethereum tokens in the market. According to the report, the government transferred about 7,000 ETH tokens, valued at over $16.7 million, from funds seized from PlusToken, a massive multi-billion dollar Ponzi scheme.

However, the PlusToken-related wallet, which has been inactive for almost three years, still contains 542,000 ETH, which is currently valued at around $1.3 billion. This latest transfer has raised concerns about a potential selloff, which could increase selling pressure on Ethereum’s price, which has recently slipped into the $2,300 region. Ether has also seen a decline of over 2% in the last 24 hours, adding to the bearish trend.

Chinese Authorities Transfer 7,000 ETH, Obfuscating Past Transactions Related to Seized PlusTokens Funds

The Chinese government recently transferred 7,000 ETH coins from seized funds of the popular PlusToken Ponzi scheme. ErgoBTC, an analyst at OXT Research, disclosed this in an October in an X post.

The analyst observed that the Chinese government's wallets linked to the seized funds, which have been largely untouched since 2021, began making some transfers. After the recent transfer, about 542,000 ETH tokens, which are currently valued at over $1.3 billion, remain in the wallet. Many are speculating that if the government sells these coins, Ethereum’s price could take a hit.

In early August, the remnants of ETH seized from the multibillion-dollar PlusToken scheme woke on-chain for the first time since 2021.

Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L

— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024

PlusToken emerged in 2018, presenting itself as a South Korean crypto exchange and digital asset wallet provider. It operated a multi-billion dollar crypto pyramid scheme, scamming investors with promises of high-interest accounts to its customers.

Between 2018 and 2019, PlusToken defrauded over 2.6 million users, collecting about 194,000 BTC and 830 ETH tokens.

As the platform's scamming tactics became more evident, the Chinese police seized a large portion of its assets, including BTC, ETH, and other digital currencies, which were valued at around $14 billion at the time. The authorities also arrested over 100 individuals linked to the PlusToken scam.

Meanwhile, between 2019 and March 2020, the government proceeded to sell nearly all the confiscated BTC coins, which were valued at about $1.3 billion at the time. During this period, Bitcoin had a market cap of about $160 billion.

However, it left the seized Ethereum tokens untouched until the summer of 2021, when it moved one-third of 840,000 ETH to the Bidesk crypto exchange and sold them.

According to ErgoBTC, the remaining ETH tokens, which were spread across several addresses, remained inactive until August 2024. At that point, the authorities proceeded to distribute 542,000 ETH, which was valued at nearly $1.3 billion, to 294 new crypto addresses.

ErgoBTC stated: “Given the recent effort to re-obfuscate the ETH, it is unlikely that the active distribution of the 15.7k ETH moved yesterday is the last of the 540k ETH supply distribution.”

Recent Ethereum Price Trend Amid Selling Pressure

Following the alleged massive offloads from the Chinese government, some observers are anticipating a downturn in Ethereum's price. Already, Ether slipped below the $2,400 region as the broader crypto market faced bearish pressure.

According to data from CoinMarketCap, ETH trades at $2,395. Ether has been trading sideways for over two months and has yet to break past the $2,700 resistance level while maintaining a strong support at $2,200.

In addition to the Chinese government sales, other parties are also dumping ETH. According to X user @RunnerXBT, even as Ether-based ETFs record more net outflows, major Ethereum holders