One of the largest ever seen crypto scams, PlusToken, known to be a Ponzi Scheme, saw about $1 billion worth of crypto taken from over 715,000 victims has remained an ongoing case with the funds still not yet fully recovered or accounted for.
However, in a flurry of movement, multiple millions of different crypto assets linked to PlusToken accounts have suddenly been on the move. It began when XRPL Monitor detected nearly 30 mln XRP transferred by an account linked to PlusToken, along with other transactions totalling 71.5 mln of Ripple’s XRP.
Furthermore, Whale Alert, a well-known big transaction monitoring Twitter account, has also picked up a huge $187 million transaction from a PlusToken account in ETH.
Not the first time
PlusToken-linked coins have been on the move recently across a number of different cryptos. Earlier this week a wallet with links to the scam moved 26,316,339 EOS tokens that equated to about $67 million to an anonymous crypto wallet created less than 24 hours ago. The transaction was caught by Whale Alert.
The concern is that these sell offs of huge sums of crypto could cause havoc on the markets. In fact, In November last year, crypto researcher Ergo said such a selloff was possibly driven by the PlusToken scammers liquidating 200,000 BTC on the open market.
Similarly, research firm Chainalysis suggested in its December 2019 report that PlusToken scammers may be using over-the-counter (OTC) off-ramps to sell BTC, driving down the price.
Ethereum in danger?
This latest dump of Ethereum is by far one of the largest linked to PlusToken, and this has issues and implications for the chain itself as it has been suggested that its fundamentals may be at risk. If a sell off occurs and the price of ETH is driven right down, all the effort and work around the stablecoins, DeFi, and increased transaction numbers could be undone.
There is a trend known as “yield farming” on the Ethereum-based DeFi ecosystem that has been upping its growth and this comes with a degree of liquidation risk if the underlying assets being used declines in value.
As such, a sharp ETH selloff could cause widespread DeFi liquidations, halting the sector’s massive growth and striking a blow to the cryptocurrency’s fundamental strength.