PlusToken Crypto Scheme Update

Around 7,000 ether (worth $16.7 million) from the multibillion-dollar PlusToken crypto Ponzi scheme was moved to exchanges, potentially signaling the sale of the entire $1.3 billion in ether seized from the scheme, according to analyst ErgoBTC from OXT Research, reported on X Wednesday.

This activity follows a two-month period where wallets linked to PlusToken had been dormant since 2021 before large amounts of ether began to move again.

ErgoBTC noted, “Current ETH distribution follows the same attempted obfuscation pattern as that of the BTC in 2019, with a likelihood of full sale of the $1.3b of ETH in the future.”

PlusToken was a Chinese crypto pyramid scheme that defrauded over 2.6 million people in 2018 and 2019. A local police crackdown confiscated over $14 billion in bitcoin, ether, and seven other cryptocurrencies.

According to a court document reviewed by ErgoBTC, the seized crypto was handed over to Beijing Zhifan Technology Co to sell and convert the assets into cash for restitution.

The OXT analyst mentioned that an “overwhelming majority” of bitcoin, approximately worth $1.3 billion, was sold between 2019 and 2020. Conversely, around 542,000 ETH (valued at $1.29 billion) remained untouched in thousands of mixing addresses until August, when they were redistributed to 294 new addresses.

This Tuesday, about 15,700 ETH were transferred out of the mixing addresses, following patterns similar to those seen in 2020 and 2021. ErgoBTC indicated that approximately 7,000 ETH were sent to several exchanges, including BitGet, Binance, and OKX.

ErgoBTC concluded, “Given the recent effort to re-obfuscate the ETH, it is unlikely that the active distribution of the 15.7k ETH moved yesterday is the last of the 540k ETH supply distribution. This recently observed behavior introduces a new, unexpected supply overhang to Ethereum.”