Wallets linked to the PlusToken Scam Move Ether

Wallets linked to the PlusToken scam that had been dormant for over three years moved large amounts of ether on Wednesday, according to blockchain analysts.

The ether funds started moving early Wednesday morning and were traced back to the “PlusToken Ponzi 2” wallet, blockchain analytics platform Lookonchain stated on X, and had not previously been moved since 2021. The “PlusToken Ponzi 2” wallet dispersed 789,533 ETH, now worth nearly $2 billion, among multiple wallets in 2020.

While Lookonchain initially claimed “hundreds” of wallets were involved, subsequently deleting the post, fellow analytics platform EmberCN later said it had tracked only 12 addresses that had received PlusToken-linked ether in the last 30 hours, totaling 25,757 ETH (+2.48%, $63.1 million). “Most of these 789,533 ETH entered the Bidesk exchange through multiple addresses between June and September 2021 (this exchange went bankrupt at the end of 2021), and then were withdrawn from Bidesk and transferred to Huobi,” EmberCN said, adding that part of Wednesday’s transfers were not sent to Bidesk in 2021 and part were withdrawn from Bidesk but not transferred to Huobi (now HTX). “Most of [the 789,533 ETH] should have been sold in 2021, and what is currently [being transferred] is a small part of that not sold in 2021,” it said.

However, not to be left out, blockchain intelligence firm Arkham weighed in with its own analysis of the situation on Wednesday afternoon, suggesting that “dozens” of wallets connected to PlusToken had moved $464.7 million worth of ether in the past 12 hours.

The ether was among crypto assets seized by Chinese police during a crackdown on the PlusToken Ponzi scheme in 2020.

A total of 194,775 BTC, 833,083 ETH, 1.4 million LTC, 27.6 million EOS, 74,167 DASH, 487 million XRP, 6 billion DOGE, 79,581 BCH and 213,724 USDT were seized by Chinese law enforcement from seven convicts, according to a November 2020 court judgment — worth $4.2 billion at the time and over $14 billion in today’s prices.

The court said in 2020 that the seized cryptocurrencies would be “processed pursuant to laws” and “forfeited to the national treasury,” without elaborating on how they would be processed.

It is unclear why the funds have been moved now and whether or not they remain in the control of Chinese authorities.

The price of the second-largest cryptocurrency by market cap fell approximately 2% immediately following Lookonchain’s post to $2,474, according to The Block’s Ethereum Price Page. Other cryptocurrencies fell by similar amounts in the same period.

The PlusToken Case

The PlusToken criminal case was initially ruled on in September 2020 by a lower-level district court in the city of Yancheng in China’s Jiangsu province.

Local media reported at the time that the masterminds behind the crypto Ponzi scheme defrauded more than 2 million people for more than 50 billion yuan, or $7.6 billion.

According to the 2020 ruling by the Jiangsu Yancheng Intermediate People’s Court, the PlusToken operation officially started in May 2018 and advertised a non-existent crypto arbitrage trading platform. It promised users attractive daily payouts but would require them to deposit at least $500 worth of crypto assets in order to participate.

Between April 6, 2018, and June 27, 2019, the pyramid scheme lured in over 2.6 million members across 3,293 layers, the court said.

A total of 15 people were convicted in connection to the PlusToken case. They were sentenced to between two and 11 years behind bars with fines from $100,000 to $1 million.

Updated with additional analysis from EmberCN and Arkham.