PlusToken crypto scam caught dumping $105M in ETH

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PlusToken, a cryptocurrency wallet accused of absconding with billions of dollars, has reportedly moved its Ethereum stash.

Twitter-based transaction monitor @whale_alert first reported PlusToken had shifted 789,525 ETH, worth more than $105 million. This comes on the heels of reports that PlusToken sought to liquidate $2 billion worth of cryptocurrency, almost 1% of Bitcoin supply, causing more volatility in the market. Analysts also suggested Plustoken was looking to dump its ETH stash. At the time of writing, Ethereum is trading down marginally at its current price of $127, which marks a notable decline from its daily highs of $134 that were set at the peak of the recent rally experienced by the aggregated crypto markets.

🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 789,525 #ETH (105,099,509 USD) transferred from PlusToken to unknown wallet

Tx: https://t.co/9kTSZy7Y1G

— Whale Alert (@whale_alert) December 19, 2019

Based in China, PlusToken claimed to have rewarded users with high rates of return if they purchased the wallet’s associated PLUS cryptocurrency tokens with BTC or Ethereum. The company promised those returns would generate an “exchange profit, mining income, and referral benefits.” Chinese media reported that this was a scam that attracted over $3 billion worth of cryptocurrency because of the success it had in referrals and brand awareness. The company had a major following in Korea and China—especially among investors not familiar with cryptocurrencies; PlusToken hit a peak price of USD 350, raking in “investments” from millions of people, according to blockchain analytics firm Chainalysis.

Chinese authorities arrested six individuals connected to PlusToken in June. However, the stolen funds continue to move through wallets and cashed through independent OTC brokers operating mostly on the Huobi platform. Reports indicated that 180,000 BTC, 6,400,000 ETH, 111,000 USDT, and 53 OmiseGo (OMG) went from scam victims to PlusToken wallets, equating to roughly $2 billion. Some the money was paid out to early investors, presumably to maintain the appearance of high returns to present PlusToken as a legitimate operation. Most times, it’s difficult to distinguish whether the transfers made by the PlusToken went to early investors or addresses under their control.

Scams like PlusToken are becoming all too common in the cryptocurrency world. Research suggests in 2019, Ponzi schemes and scams had defrauded over a billion dollars out of millions of victims around the world. Besides the monetary losses sustained by affected individuals, scams paint a negative picture of the industry and may scare off potential participants. Any cloud “mining” token that “guarantees” a high return without a clear and audit-able business plan should generate red flags.