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Cryptocurrency News Articles
Chinese Government Transfers 15,700 ETH Linked to the Multi-Billion PlusToken Ponzi Scheme
Oct 10, 2024 at 03:17 pm
Chinese whale wallets came to life for the first time in 2021. A researcher on X flagged that the wallets have transacted 15,700 ETH in the last 24 hours.
A crypto researcher has revealed that the Chinese government transferred 15,700 ETH linked to the multi-billion PlusToken Ponzi scheme from its wallets and 7,000 ETH to crypto exchanges, raising concerns over imminent liquidations.
The revelation comes as the crypto market showed signs of a slowdown on Wednesday. Bitcoin opened the day at $62k before dipping to $60k during U.S. trading hours. On the other hand, ETH plummeted 3.2% on the same day.
Bitcoin is exchanging hands for $60,775, down 2.56% in the last 24 hours. ETH has been down 2% in the last 24 hours and is trading at $2,393 at the time of this publication, according to Coinmarketcap.
A crypto researcher known as FreeSamourai on Twitter flagged the movements of the Chinese whale wallets for the first time in 2021. The researcher stated that the wallets have transacted 15,700 ETH in the last 24 hours.
“About 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens,” FreeSamourai said in a tweet on Monday.
The remaining 542k ETH is valued at $1.3 billion. A portion of the ETH is being moved to wallets associated with crypto exchanges such as Binance, Bitget, and OKX, suggesting an intent to sell.
The researcher added that some of the ETH is being moved to wallets associated with Binance, Bitget, and OKX, suggesting an intent to sell.
The remnants of ETH seized from the multibillion dollar PlusToken scheme awoke 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
The PlusToken scheme defrauded investors to the tune of $4 billion before it went bust in mid-2019. The Chinese authorities cracked down on the scheme, arresting the orchestrators and arraigning them in court.
The ringleaders were found guilty of defrauding investors, and a Chinese court sentenced them to eleven years in prison in December 2020. The government also confiscated $4 billion worth of crypto linked to the PlusToken scam in November 2020.
The confiscated crypto assets included Bitcoin, Ethereum, Dogecoin, and XRP. According to court documents, the crypto assets were handed over to Beijing Zhifan Technology Co. for conversion to fiat, and the proceeds were used as restitution to the victims.
The PlusToken platform was established by a ringleader known as Chen Bo in early 2018. The platform capitalized on blockchain technology to receive registration fees in crypto from millions of investors.
The platform offered to give investors high returns based on the number of referrals they made and the amount they invested. The ring leaders compensated early investors with proceeds from new members while there were no real business or investment operations.
At its peak, the PlusToken BTC cluster received more than 10,000 Bitcoin in inflows, which were valued at more than $80 million at the time. It is believed that the Ponzi scheme shut down with more than 200,000 BTC.
The majority of the Bitcoin was sold between August 2019 and March 2020, liquidating $1.3 billion, at a time of a market cap of $160 billion. Today, the selling pressure would be equivalent to liquidating $10 billion, according to the researcher.
The researcher noted that ETH remained untouched in confined wallets since the seizure until the summer of 2021. He stated that a third of the 840,000 ETH was transferred to a wallet associated with an unpopular exchange called Bidesk and assumed to be sold.
The remaining ETH is untouched in thousands of mixing addresses until August 2024, when the assets were reconsolidated to 294 addresses. The addresses held 542,000 ETH worth $1.3 billion until yesterday’s transactions.
According to data from Bitcoin Treasuries, China currently holds 190,000 Bitcoin. The jurisdiction trails behind the United States, which holds 203,239 Bitcoins, the largest Bitcoin holder among governments. The United Kingdom trails in third with a Bitcoin supply of 61,000.
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