PlusToken is a name that is by now familiar to everyone inside crypto. The Chinese scam hoodwinked millions of victims into handing over more than $3 billion worth of cryptocurrency, the sales of which have been accused of frequently crashing the Bitcoin market. But just how did they manage to accumulate such a haul, and where are the perpetrators now?
PlusToken launched in May 2018 as a cryptocurrency wallet that rewarded users with high rates of return if they purchased the wallet’s associated PLUS cryptocurrency tokens. Referral bonuses enticed investors to rope friends and family into joining, sold on the promise of anything up to 18% monthly returns, with a pyramid-scheme style 4-tier upline/downline sales approach.
If this sounds a lot like OneCoin and BitConnect that’s because it was – PlusToken ran their operation directly from the OneCoin/BitConnect playbook, with lavish launch parties in China and Korea dazzling potential investors with the promise of what they could achieve if they invested.
They supplemented these with many online and offline seminars in Asia and even as far afield as Germany, again extolling the seemingly risk-free way to riches, reeling investors in by the thousand.
Withdrawals Dry Up
PlusToken enjoyed a bumper 2018, with the token being listed on several Chinese exchanges and hitting a peak price of $350 USD. As with any Ponzi scheme, initial investors were simply paid out with newer investors’ money, with many unfortunately buying more PLUS tokens with their payouts.
Everything seemed to be going swimmingly until June last year when investors began to complain that they couldn’t withdraw funds from the platform – a key indicator that the investment is a scam.
PlusToken initially put this down to higher Bitcoin miner fees meaning the transactions were stuck on the blockchain awaiting processing – again, like OneCoin, avid supporters decried the complaints and reinforced their support for the project.
When the transactions finally began ‘moving’ again, a note appended to one seemed to make the position very clear:
The scammers may have thought they had had the last laugh, but the authorities had other ideas – Chinese law enforcement officials traced the operation to Port Vila on the island of Vanuatu, where six individuals were arrested on suspicion of running the scam from the island.
The arrests did not allow police to get their hands on the stolen funds however, which have been making their way to exchanges, mixers, and OTC dealers to turn into cash ever since. An investigation by Chainalysis revealed the approximate numbers and denominations of coins taken, not including what was paid back to initial investors:
We tracked a total of 180,000 BTC, 6,400,000 ETH, 111,000 USDT, and 53 OMG (OmiseGo) that went from scam victims to PlusToken wallets, equating to roughly $2 billion.
PlusToken Dumping Causing Market Crashes?
PlusToken dumping has been blamed for several small scale crypto crashes in the past seven months, and while exact causation cannot be established, the timings of their known token moves, which often equate to hundreds of millions of dollars in value, have coincided with consequent collapses in the Bitcoin price.
PlusToken is one of the biggest Ponzi schemes ever, and acts as another reminder, alongside OneCoin, BitConnect and others, that nothing comes for free, especially in crypto.