PlusToken is a scam project that can be compared with ICO TON in terms of the amount of raised funds. The pyramid collapsed in the summer of 2019, and we could safely forget about it if we do not take into account the losses of defrauded investors. People associated with PlusToken still launder dirty capital, and on such a scale that they can even affect the Bitcoin rate.
PlusToken appeared on the market as a multi-currency, completely secure wallet. In addition to decentralization and the complete inviolability of user funds, the project also promised a profit. They promised to charge the user with the available amount every month from 10% to 20% depending on the type of currency and its storage period through the use of a “revolutionary” profit distribution system. In general, the classic story of the Ponzi is to give some money, and the project will turn it into a lot of money and return some of it.
The project was positioned as international with a development team in Japan, Korea, China, and several other countries. The plan of the creators was a figure of 10,000,000 users, but at the time of the collapse, PlusToken collected only 3,000,000. Actively distributed in China, Asia, and even the CIS countries, while in the West, neither users nor journalists knew about the project.
Especially for our readers, we dug up the cute PlusToken ad (there are pictures and presentations) on the Medium.
The true scale of the scheme is unknown to this day, as the data of analysts vary.
Presumably, the total amount of investments is about $ 2 billion (CipherTrace estimated losses at $ 2.9 billion).
It is also known that money was collected in EOS and BTC, and possibly in other coins. The multi-currency wallet supported 9 currencies in total. According to other sources, PlusToken accumulated on accounts:
The most controversial figures are just about Bitcoin. Therefore, the cryptanalyst Ergo mentioned the 200,000 coins in his Twitter account:
If my numbers are correct, the 200k BTC estimates reported earlier this year were correct, and market impacts will continue for some time.
— Ergo ∴Politically Charged∴ (@ErgoBTC) November 21, 2019
In December 2019, Chainalysis reported that PlusToken had already sold 25,000 BTC and another 20,000 remained with them, estimating the total amount of bitcoin investments at 45,000. Dovey Wan, the managing partner of Primitive Ventures, announced two accounts right after the founders’ arrest, of which 169,000 coins are stored in total:
4. A security audit firm Peckshield has done a graph analysis of the money flow from PlusToken’s wallet in early July, and figured out abt total ~1000 has gone into Bitrrex and Huobi. So basically the sells off has started around early July pic.twitter.com/uDXw1vt38t
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) August 14, 2019
On June 27, 2019, the first user complaints about problems with the withdrawal of funds appeared. Since on June 29, the exchange rate of the project’s native token was at around $ 139. On July 1, it became known that the company’s management is accused of fraud. However, the Chinese police combed the PlusToken office in Hunnan in early March.
On June 29, 6 suspects in the PlusToken case were detained (presumably the founder of the pyramid) and they were extradited to China:
I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells pic.twitter.com/uIjgrzwHET
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) August 14, 2019
Dovey Wan also said that most of the wallets that hold company funds are protected by multi-signature, so the police cannot access the funds.
$ 3 billion is not a roll of bills stolen from a stall and spending it is not so simple. In fact, money laundering began immediately after the disappearance of company management.
Therefore, analysts at Elementus published the results of the study, which indicated the exchanges through which funds were withdrawn. More than 6 million ETH were laundered through 5 websites, and 50% of transactions were made by Huobi:
It is quite clear that the release of such a volume of assets did not go unnoticed. We know that only part of the investments was attracted to Bitcoin. At the same time, we do not know in what currency the creators of PlusToken withdrew these funds. Most likely, these were just BTC, because, after the cessation of the operation of the pyramid, the course of the first cryptocurrency completely dropped immediately:
The drop from almost $ 14,000 to $ 10,000 is difficult to explain with the usual market correction. We can also assume that further fluctuations in the exchange rate are also associated with the release of PlusToken huge amounts from their accounts.
At the end of November, the same Dovey Wan from Primitive Crypto expressed the opinion that not only the summer collapse but also all the BTC fluctuations were associated with PlusToken since February 2019.
Hence, she pointed out that in March-April, when the pyramid to attract new users (and funds), the Bitcoin exchange rate began to grow rapidly and this growth continued until the arrest of the attackers:
IMO PlusToken is the main force for both the bull and bear from April to YTD
What I can share publicly here
1. After CNY 2019 (Feb 5th) PlusToken on-ramp spike up significantly in Mar and Apr
2. Its team were arrested Vanuatu time on 6/25.. BTC crashed a day after https://t.co/WGvTLYmpgd
— Dovey 以德服人 Wan 🪐🦖 (@DoveyWan) November 27, 2019
According to Ergo data, this is quite possible: 200,000 BTC are a huge amount, which is quite enough to bring down the market, especially if you create demand for it. But the December Chainalysis report estimated PlusToken’s remaining reserves at only 20,000 BTC and an indefinite amount of ETH, which is much more modest.
Note, a few days after the publication of the article of December 16, Bitcoin has dropped again:
At the end of December, data also appeared on the movement of assets in ETH. On December 19, WhaleAlert recorded a transfer of 789 525 ETH worth more than $ 100 million:
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 789,525 #ETH (105,099,509 USD) transferred from PlusToken to unknown wallet
— Whale Alert (@whale_alert) December 19, 2019
Interestingly, these funds remained on the new wallet. However, another major transaction followed in February.12,000 BTC worth $ 117 million were transferred to two wallets this time. The transfer was recorded by PeckShields, a crypto security company.
Ergo announced that PlusToken sent a total of 13,000 BTC to the tumblers in March:
~13k in new PlusToken mixer deposits in last 24 hrs.
Almost all previous mixer deposit change has entered mixing, confirming my theory.
Distributions still on/off. Much slower than September and November.
New report and full sit rep imminent. pic.twitter.com/vwrBuVk272
— Ergo ∴Politically Charged∴ (@ErgoBTC) March 6, 2020
This tweet was published on March 7, 2020. Then, Bitcoin first smoothly slipped from a peak of $ 9,000, and then completely collapsed to $ 4,500:
Is this another coincidence?
Well, the latest information was published by OXT Research report on March 17.
The study focuses on PlusToken’s huge capital distribution schemes. According to OXT Research, more than 30,000 BTC remain in the tumblers of the pyramid, and more than 3,000 are in the process of being “cleaned up”.
If this is correct, Chainalysis miscalculated significantly, noting about 20,000 coins in PlusToken reserves only.
OXT Research noted that they did not analyze exchange transactions, but allegedly fraudsters have already managed to launder cryptocurrencies worth $ 1.3 billion. Note, that cryptocurrencies were sold only when the market came to its senses after another major “dump” and the rate started to grow again.
If CipherTrace correctly calculated the amount of losses, and OXT Research the volume of the currency sold, then PlusToken still has enough reserves to fluctuate the market for several months.
And now, the attackers have two options: either lie low after such noticeable transfers so that the rate stabilizes again, or merge all that is until they are calculated. The second scenario, however, is unlikely because the market value of Bitcoin is now close to 2018 anti-records.
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