This article was originally published by 8btc and written by Lylian Teng.
Bitcoin’s recent dip under the $10,000 mark is alleged to be directly related to the incessant bitcoin sell-off caused by a $3 billion Chinese Ponzi scheme, and the dump may continue.
The scam project, dubbed PlusToken, went bust early in July 2019 after Chinese police arrested a core team member of the scheme who had escaped to Vanuatu at that time. Identified as one of the largest Ponzi schemes in the cryptocurrency space, PlusToken made off with over 200,000 BTC, 800,000 ETH and 26 million EOS, for a total of around $3 billion.
For example, here are three confirmed BTC wallet addresses tied to the PlusToken scam and the amount of BTC in each:
- 14BWH6GmVoL5nTwbVxQJKJDtzv4y5EbTVm (Total 95,288 BTC received)
- 31odn4bxF2TgM4pD7m4hdSr1vGMsjh9ugV (Total 68,562 BTC received)
- 33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF (Total 37,922 BTC received)
The cryptocurrency obtained in the scam has not been recovered as the people who hold the keys to these wallets have not been caught, and authorities cannot access them.
PlusToken wallets monitored by crypto security firm PeckShield have been detected moving the fraudulent funds into many different addresses, including some cryptocurrency exchanges, since early July 2019. Over the past few days, 5,775 BTC was found to be moved in relatively small batches (about 50 to 200 BTC per batch) into many different addresses (making it easier to send these funds to exchanges).
Slumping Bitcoin Price
In the meantime, a chat screenshot circulating among Chinese traders claims that the latest downturn in the cryptocurrency market seems to be a result of mass sell-offs from PlusToken, who has been dumping the scammed 200,000 BTC, 100 BTC at a time, incessantly for five days on the cryptocurrency exchange Binance.
According to the chat, the bitcoin price slump began to ease somewhat simply because the dump stopped during Binance’s system upgrade. The chat also surmised that the scammers chose to dump the ill-gotten cryptocurrency on Binance because frequent over-the-counter (OTC) trading on Huobi and OKEx (the Chinese cryptocurrency exchanges favored by most Chinese cryptocurrency traders) would trigger alarms and lead to accounts being frozen.
In an effort to curb the impact of such sell-offs on the crypto market, Dovey Wan — founding partner of crypto investment fund Primitive Ventures — asked security firms to keep a closer eye on whether the scam’s perpetrators are moving more funds into exchanges and called on exchanges and OTC platforms to blacklist those wallet addresses.
PeckShield also found that, on August 14, 2019, another wallet connected to PlusToken was active — around 23,000 BTC was transferred into four new addresses, with 4,922 BTC, 5,000 BTC, 6,000 BTC and 7,000 BTC being moved. However, it is still unclear whether these funds will flow into exchanges.
Graph showing PlusToken’s addresses and money flow in early July 2019, made by PeckShield Graph showing one of PlusToken’s addresses starting with “1M1Tfsvb” and fund flow on August 12, 2019, made by PeckShield
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