The PlusToken scammers who netted an estimated ₿200,000 before the scheme was busted last year have moved ₿12,000 between wallets, fueling fears that a mass sale is on the cards. The sum represents a good portion of their remaining holdings, and if history is any guide then we could be about to experience a temporary halt to the bull run as they sell off their ill-gotten gains.
$117 million of BTC associated with PlusToken Ponzi scheme has just moved to this addresshttps://t.co/Hmom3hDoF7
— Larry Cermak (@lawmaster) February 11, 2020
Too Big to be Believed
News of the PlusToken scam, and more importantly their gargantuan level of holdings, emerged last year when six of the ringleaders were arrested by Chinese police on the Pacific island of Vanuatu, from where they were said to be operating the scam.
Initially the suggestions that they were hoarding such a huge number of BTC were dismissed as exaggerated, but research by Chainalysis revealed that the numbers didn’t lie:
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.
Once the numbers were comprehended, the market suddenly became very scared that a dump was imminent, and it came, with $25 billion wiped off the entire market cap in 24 hours when the story broke properly in August.
Whether this dump was a direct result of PlusToken sales or just the fear of them wasn’t initially clear, but the same report by Chainalysis confirmed that, indeed, there was a strong correlation between the Bitcoin price and PlusToken cashing out:
…any uptick in on-chain volume [was] followed by an uptick in trade volume, as OTC traders receive Bitcoin from PlusToken wallets and subsequently exchange it for Tether.
History Repeating?
It is this factor that has the market spooked – according to Chainalysis, the PlusToken scammers (or those in control of the funds) still have “at least” ₿20,000 left to liquidate, which represents a current market value of $196 million. With so much Bitcoin left to liquidate, there is a strong argument to be made that we won’t see a true Bitcoin bull run until this hurdle is cleared.
In that case it is better to have them sell their holdings now and rip the band aid off then have a Sword of Damocles hanging over the market’s head, knowing that so much BTC is out there ready to be dumped when they deem the price high enough. For now though, all we can do is watch and wait…
