A fraudulent Chinese Bitcoin Ponzi scheme, dubbed PlusToken, appears to be in its death throes after its exit scam caught the ire of Chinese police earlier this year. The authorities tracked down six suspects of the scheme on the small island of Vanuatu and arrested them in something sounding very much like a James Bond novel, but it appears there is still some action to be had.
Plustoken allegedly netted nearly $3 billion in Ethereum and Bitcoin, having started in mid-2018 offering a high yield investment return. Turns out that was just code for massive Ponzi scheme as the site suddenly went dead, and the money disappeared.
Now, even with Chinese police all over it, it looks as if some of that $3 billion is on the move. Dovey Wan — founding partner of blockchain-based investment company Primitive Ventures — called attention to the ongoing mass sell-offs which could even have something to do with Bitcoin’s sudden price collapse over the last two days.
According to Wan, who has shown data on addresses associated with PlusToken, money is on the move from these accounts to different exchanges in small batches – but at an incessant rate.
Even though the six national arrested in Vanuatu are core members, there appears to still others out there who have control of the money, and they are looking to cash in. As Wan explains:
“Many of their BTC addresses are started with P2SH which commonly used for multi-sig, most likely some ppl[sic] who hold the keys are not being caught hence police can’t unlock the wallet. For EOS/ETH wallet can be diff[sic] case but so far police was not able to touch any of those.”
She goes on to explain that the sell-off may have started as far back as mid-July and that Chinese traders are reportedly claiming an unknown address has been dumping 100 BTC incessantly on Binance.
Now that the money is on the move, the fraudsters have opened themselves up somewhat to police action; however, the transactions will still be final. It is now up to the exchanges to try and stamp down on this now and to stop any more money making its way out by blacklisting the addresses.
Although, it is easier said than done as a little more investigation will have to go into these wallets before they are blacklisted. Wan may be a font of knowledge on such a matter, but more evidence will be needed.
If the scammers have been looking to wash all their $3 billion of ill-gotten gains in a short space of time, perhaps it could account for the sudden market sell-off for Bitcoin. The price of the coin has fallen quite rapidly over the last 48 hours, now under $10,000.
However, it could very well be a coincidence that news has emerged of a Bitcoin dump at the same time as the market began to plunge – it all depends on the size of the dump.