A multi-billion dollar crypto Ponzi scheme operating out of China could be weighing down SegWitCoin (BTC) prices, as it continues to offload BTC in their hundreds.
The $3 billion scam was flagged by Dovey Wan, founding partner of blockchain investment firm Primitive Ventures, as being involved in mass sell-offs of BTC raised from its so-called ‘investment scheme.’
1. PlusToken started in mid 2018, was a pure ponzi with a wallet front with offers “high yield investment return”.
It has 4 layers of membership structure, each will get diff % of rebate. In early 2019, it claimed its membership has over 10M
And attached are its addresses pic.twitter.com/KcMRfXRp79
— Dovey 以德服人 Wan ? ? (@DoveyWan) August 14, 2019
Known as PlusToken, the Ponzi scheme is reported to have caught as many as 10 million individual investors, with investment totaling $3 billion.
Founded in the summer of 2018, PlusToken promises investors astronomical returns across four different tiers, depending on the level of their investment — a feature analysts suggest is typical of most similar Ponzi structures.
Wan highlighted specific wallet addresses that are known to be linked to the project, and called on exchanges and other services to blacklist the addresses in order to prevent further abuses from impacting on both the BTC market and PlusToken investors.
Wan noted that the scam has already led to investigations by police in China, with the authorities tracking down one of the scheme’s promoters just two months ago.
According to the data presented by Wan, major sell-offs from the scheme began as far back as July, and are continuing to show heavy dumping of BTC assets.
However, Wan said that despite being a known-Ponzi scheme, there were limited options for next steps:
Many of their BTC addresses are started with P2SH which commonly used for mutil-sig, most likely some ppl who hold the keys are not being caught hence police can’t unlock the wallet. For EOS/ETH wallet can be diff case but so far police was not able to touch any of those.
Noting that the firm is shifting funds in small pockets of 50-100BTC, Wan said more needed to be done to track and monitor activity around the scheme.
Wan suspects that crypto exchange Binance has some involvement in the scam, with the exchange often at the forefront of sell-offs from the wallets she flagged for their connection.
PlusToken is only the latest crypto Ponzi-scheme to hit the headlines, with investors urged to exercise caution, especially when crypto investments are solicited on the promise of unrealistic returns.
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