The PlusToken scam is one of the biggest multinational pyramid network scam involving cryptocurrencies that originated in China and ended up netting more than $5.7 billion or 40 billion Chinese Yuan by duping victims all across the globe.
The whereabouts of those behind the major scam have been unknown for quite some time until July this year, when the Chinese police arrested 27 core members involved in the scam, in an operation led by the nation’s top police agency, the Ministry of Public Security.
Now, latest reports state that these core members have now been proven guilty of defrauding thousands of investors off 14.8 billion yuan ($2.25 billion)-worth of cryptocurrency in the eastern province of Jiangsu, China.
The news was reported by the Chinese media outlet the South China Morning Post on Tuesday, which stated that Chen Bo, orchestrated the entire scheme and started it as a blockchain project back in 2018, to attract millions of investors by promising massive gains. Members even had to pay membership fees in digital assets.
The report adds that in between 2018 and 2019, Chen and his associates used social media and different offline events to recruit members for this scheme, who paid fees worth $500 in various digital assets like bitcoin.
Besides offering returns on “arbitrage”, which never existed, the scam also offered different benefits based on the level of membership on acquires and the number of new members they help recruit to the platform.
By the time the PlusToken Ponzi had come to an end, it had over 2.5 million members with more than 3,200 levels of investors. In total, the scheme had amassed approximately 14.8 billion yuan worth of different types of cryptocurrencies, including more than 310,000 bitcoin – the largest cryptocurrency. The total was calculated based on the price of these tokens at the time.
Going to Jail
Last year in January, Chen and his associates had fled to Cambodia to continue the scam. The group hired local staff to act as the platform’s “founders” to make it look like an international project. Chen paid his staff using cryptocurrencies and also liquidated 127 million yuan to buy properties and luxury cars for him and his relatives, according to the court document.
This followed their arrest in July and the court in Yancheng, Jiangsu, sentenced Chen and 13 other associates between two and 11 years in jail, with fines ranging from 120,000 yuan to 6 million yuan. One of the team members, Chen Tao, helped transfer illegal gains. He has been sentenced to more than four years in jail. All confiscated digital assets were turned over to the state.