Chinese Ponzi Scam Floods Exchanges And Hits Bitcoin Price

Chinese Ponzi Scam Floods Exchanges And Hits Bitcoin Price

According to Primitive founder, Dovey Wan, the latestBitcoin sell-off is down to a major Chinese ponzi scheme. Little known outside of China, PlusToken scammed over 200k BTC and 800k ETH, which are now hitting exchanges in batches.

Not Another Bitcoin Ponzi Scam

Started mid-2018, PlusToken was a classic Ponzi scheme offering high-yield investment return. There were four layers of membership structure, offering increasing dividends. By early 2019, it had a claimed 10 million members.

The core team were apprehended by police two months ago and will be in jail for decades, according to Wan. However, the reported $3 billion of cryptocurrency they scammed out of members has not been recovered.

Many of the Bitcoin wallet addresses used are believed to be multi-sig, leading to speculation that some key holders remain at large.

The Bitcoin Sell-Off Began In Early July

Security audit firm, Peckshield, has been monitoring money-flow from the PlusToken wallets, and found that since early-july about 1000 BTC has gone into Huobi and Bittrex exchanges. Funds have been moving in small batches of 50-100 bitcoins per batch.

Unconfirmed reports from Chinese traders suggest that someone has also been consistently dumping 100BTC batches onto Binance. This is also believed to be related to PlusToken.

Not News Until Now

One of the big questions around all this is Why are we only hearing about it now?.

Again, according to Wan, there are three main reasons that exchanges have not paid attention. The main one being that the scam has not been known outside of China, with the possible exception of South Korea.

Added to this, Chinese exchanges didnt act because the case has officially been closed by Chinese police. Finally, police didnt work with the exchanges, because cryptocurrency exchanges are officially banned in China.

So What Should We Do?

Both Peckshield and Chainalysis are monitoring the coins involved in the scam, but exchanges must also get involved. There is potentially little that can be done about tokens which have already been cashed out. However, exchanges are able to freeze incoming tokens relating to known scams.

The important thing is to ensure that the relevant parties are aware of the situation. Because, 200,000 BTC flooding the market is bad news for everyone. Unless you missed out on buying sub-$10k Bitcoin last time?

Do you think this scam is the cause of the latest crypto market flash crash? Add your thoughts below.

Images via Shutterstock

The post Chinese Ponzi Scam Floods Exchanges And Hits Bitcoin Price appeared first on

15.08.2019 / 03:30 42
What is Driving the Bitcoin Price Under $10,000? Crypto VC Weighs In What is Driving the Bitcoin Price Under
Bitcoin has been absolutely slammed over the past week. Just weeks ago, you had countless analysts calling for the cryptocurrency to moon. But the
Tron Foundation Refutes Police Raid Theory, Price Still Drops 9.5% Tron Foundation Refutes Police Raid
A mob of upset investors trespassed the Tron Foundations Beijing office on Monday after getting scammed by a doppelganger firm off tens of millions
OneCoin Ponzi Scam Ringleaders Charged in United States OneCoin Ponzi Scam Ringleaders Charged
Following his arrest by authorities at LAX airport, Konstantin Ignatov, leader of the OneCoin ponzi scam, now faces charges. His sister, Ruja, who
India: Police Bust Bitcoin Ponzi Scheme that Defrauded 8,000 Crypto Investors India: Police Bust Bitcoin Ponzi Scheme
TweetShare Police in India have cracked a crypto Ponzi scheme in the city of Pune that defrauded over 8,000 investors, seizing nearly $2 million
Indian Ponzi Scheme-Funded Cryptocurrency Mine Raided by Police Indian Ponzi Scheme-Funded
Indian police have raided a cryptocurrency mining operation whose establishment was funded by a nearly $15 million USD ponzi scheme. Police seized
Indian Police Arrest Operators of $2.6 Million Bitcoin Ponzi Indian Police Arrest Operators of $2.6
Indian authorities have arrested two individuals accused of operating a bitcoin ponzi scheme that swindled some 300 bitcoins, approx. $2.6 million in
Comments (0)
Add a comment
Comment on