Among The Biggest Heist In Cryptocurrency: Plus Token.

What Is PlusToken?

Plustoken was a Ponzi cryptocurrency scheme disguised as an investment program of high yield. Project administrators closed the service in June 2019 removed more than $3 trillion in Cryptocurrencies Bitcoin, Ethereum, EOS, and others. After that, they left the message “sorry we have run. This must result in a global manhunt for PlusToken project managers and developed

In Korea and China, PlusToken had a big following particularly among investors not familiar with cryptocurrencies. It is a high-yield investment scheme that offered huge “investment” incentives in China and Korea to unsuspecting victims. He scheme offered monthly returns of 9 to 18 percent on investment with more rewards being given to larger investments. This type of investment is similar to other high yield investment programs such as “Bitconnect” that collapsed in January 2018.

How The PlusToken Scam Absconded With More Than 1% Of The Bitcoin Supply

On June 27, 2019, a group of members was detained by Chinese authorities.

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After they tried to fleece unsuspecting consumers out of about $3 billion for a wildly popular Ponzi scheme that spread through Asia. PlusToken was called in its eponymous (plus)Token, which traded on such popular exchanges as Huobi and Bithumb promised. Its “investors” monthly returns of 10 to 30 percent anywhere. It attracted over 200,000 bitcoin 1% of the outstanding stock, the entire bitcoin assets of Winklevi 789,000 ether, and 26 million EOS. The operation’s ringleader remains at large as of this study, and funds are still on the move.

The scam reeks of the same chicanery and optimistic return guarantees. As to the Ponzi scheme connected to the now-defunct BitConnect, albeit at a dramatically escalated level. BitConnect was only worth $121 million north at its highest. PlusToken publicly trading through a number of popular Chinese exchanges, has achieved a valuation of $17 billion. This would have made it the third-largest asset on CoinMarketCap. If it was classified with an all-time high of $340 a token.

So how has PlusToken swindled even more people than BitConnect has done? And where has all the money gone now that the developers face legal consequences?

A Scam Anatomy

“PlusToken’s first mention in WeChat groups is July 2, 2018. One source told Bitcoin Magazine, which refers to the article as “Tiresias” out of respect for their anonymity. While the scam would be operational almost a year before the arrest of its primary architects on Vanuatu’s Pacific Island. The operation’s apparent home base. Primitive Venture Co-Founder Dovey Wan told us its peak operating period was March through June 2019.

Wan, who acts as an informational bridge between the Eastern and Western communities of space and brought to light the PlusToken, situation on Twitter. Its mentioned that PlusToken holders began to complain. That they could not withdraw funds in the days following the Vanuatu arrests. As rumors began to spread that the organization was scamming for an exit. The remaining team of PlusToken tried to silence these talks by saying that the issues of withdrawal were due to a hacking attempt.

But even the rumors turned out to be true. Although its primary orchestrators were in Chinese custody, other PlusToken conspirators were busy fragmenting deposited funds into different wallet addresses. The alleged orchestrator of the scheme who goes by Leo is still wide-ranging. Some of the sullied war chests of PlusTokens may have been offloaded to liquidation markets. But on this front blockchain analytics companies have provided conflicting data.

Much of the group of PlusToken, Wan emphasized is not made up of conventional shareholders in cryptocurrency. Many of them have been duped too easily because they are average citizens who have learned little to nothing about bitcoin, let alone the altcoins in their orbit. PlusToken’s team even “educated” these unsuspecting investors on how to contribute to the scam by buying bitcoin, ether, and EOS.

Tiresias told that via WeChat, China’s most popular messaging app, the scheme was widely advertised. Yet his advertising was not limited to digital platforms, surprisingly enough. PlusToken held so-called “salons” conferences to promote PlusToken users ‘ scam and in-person training sessions to teach them how to promote the app to potential new users even sold in grocery stores. One video shared with Bitcoin Magazine depicts hundreds of people gathered in an opulent auditorium filled with rave lights and punctuated with K-pop music background. In another, a young man holding flyers, his back strapped with a piece of PlusToken information blazoning billboard, shoot the person recording the footage away.

PlusToken has defrauded an estimated 3 million people with these aggressive business strategies. According to PlusToken’s advertising user base Blockchain analytics company CipherTrace estimates, this figure could be as high as 4 million. While the six people arrested in Vanuatu were Chinese. The scam also proliferated in South Korea and Japan, along with many other Southeast Asian countries, among retail investor circles. Wan claims to have even received direct messages from Russia, Ukraine, Germany, and as far as Canada from affected users.

PlusToken also featured a sophisticated app. Which allowed users to instantly convert Chinese yen to Bitcoin, Ethereum, EOS Doge, Litecoin, and other altcoins. That could be converted to PLUS in turn. Users were paid out solely in PLUS tokens in proportion to their original investment. And how many new users they embarked on the scheme. PLUS users may graduate from their promotional activity to multiple echelons. Such as the highly sought-after “Big Boy” and “Great God” awards.

Some early participants of the scheme were granted their dividends as promised. But not the later investors Jeff Liu, head of the U.S. blockchain security firm PeckShield, told Bitcoin Magazine. But even those investors who earned PlusToken dividends are essentially scammed. These tokens were worthless and provide nothing in the way of financial remuneration for the 3 to 4 million investors affected.

Where The Funds Are?

Over the course of its lifetime, PlusToken has earned investments of 200,000 bitcoin, 789,000 ether, and 26 million EOS. All held in wallets controls by the PlusToken team. A report published by the Yancheng District Attorney General’s office says that the flow and movement of funds are unclear. Which is still under further investigation, probably indicating that hardware and private keys were not seized during the Vanuatu arrest. All the ether spoils of the team like its EOS holdings are still stored in its Ethereum wallet. However, funds from their bitcoin wallets were on the move through experts in blockchain analytics disagree about how much is going where.

At least 1,000-plus BTC was moved to exchanges and liquidated from data from PeckShield. But the actual figure could be much larger, Liu told Bitcoin Magazine. According to the analysis, the exchanges in question are Huobi Global and Bittrex. Since July 2019 the team has allegedly dumped their bitcoin hoard on them. Research by another service CryptoQuant alleges that Kraken, Bitstamp, Brazilian exchange, Mercado Bitcoin and Bitcoin Mixer have also passed over 39,000 bitcoin.

Another independent member of the community reports that Binance is also being sent by the team. But this has not been checked. And neither has the results of PeckShield, according to North American blockchain analytics company CipherTrace. CipherTrace told Bitcoin Magazine that it could not fully confirm that PlusToken had scammed out in the traditional meaning of the term. It could confirm how much money was involved in the fraud.

This is not the case with other exit scams in which the insiders made clear the funds. If there were $3 billion in cryptography at the time of the collapse, it is not clear whose pockets it is now in, “CipherTrace’s Director of Financial Investigations and Training, Pamela Garner, told Bitcoin Magazine, adding that the Vanuatu raid should have ended in law enforcement capturing hardware with staff but, according to the Yangcheng police report, it was not.

CipherTrace also found no evidence that the team of PlusToken had dumped its supplies on exchanges. PeckShield and others who tracked funds have suggested that the offloading of funds by PlusToken has led to the recent decline in prices of Bitcoin. CipherTrace doesn’t think that’s the case. The company has tracked April transactions of 95,228, 15,000, and 68,562 bitcoin to different addresses. Although the latest move of 22,922 bitcoin on August 13, 2019, broken up into several addresses did not make it to exchanges according to CipherTrace.

Garner said the recent movements of a few days ago did not go into any exchanges or attempt to dump the bitcoin into the market. The movements of August 13 entered private, single-use holding addresses. They’ve been there for a couple of days. They were not pushed to the market. It’s not BTC dumping. It could be a kind of theft or an early attempt to obfuscate money or movement.

TokenAnalyst is another analytics company that has corroborated the findings of CipherTrace. The inconsistency between the study of CipherTrace and PeckShield stems from the fact that according to the agency CipherTrace has not independently verified the statements of Dovey Wan that these particular addresses belong to it. that newcomers have advertised the following addresses on WeChat said, Wan. Bitcoin Magazine was able to independently verify that PlusToken together with its Ethereum and EOS addresses are assigned at least one of these three Bitcoin addresses.

Still, a Chinese company PeckShield holds its analysis firmly. Such analysis will be crucial for recovering filched funds some of which Liu claims have already been recovered from Bitcoin Magazine could not verify this information, he told Bitcoin Magazine. Liu said Exchanges could catch the stolen fund when they step in and the exchanges are able to do so. PeckShield worked with our customers before in similar ways to track and recover stolen funds. The Chinese law enforcement agencies are working on the recovery of the fund for this case, and the Chinese government agencies have seized at least some of the funds.

How Are We Getting Here?

The gap of knowledge that exists between the Eastern and Western cryptocurrency cultures is implicit in the inconsistencies between PeckShield’s research and CipherTrace’s own leaving the West deaf to a multi-billion dollar fraud. That has been a hot topic in Chinese media for over a month. As we have learned from China’s almost endless false news stories banning bitcoin over the years.while reliable information is failing to cross the Atlantic.

The scenario also quantifies a significant difference in the two domains between the investment climates. In Chinese retail investor scenes, multi-level marketing schemes like this one are an all-too-common plague, Wan told Bitcoin Magazine. In recent decades, China has experienced an explosion in wealth creation so Chinese citizens used to accelerate capital growth and accumulation of wealth are less prone to this form of Ponzi when they face ‘ high-yield investments, Wan said.

This atmosphere has produced a lot of unscrupulous activity both within and outside the cryptocurrency industry. Wan claims other cryptocurrency Ponzi schemes also exist to swindle investors unwittingly. One of those she pointed out, VDS has a $1 billion market cap. Only the cryptocurrency industry is harmed by these efforts. Bitcoin is still largely identified with the country’s scam activity said, Wan. Therefore, the response is education and awareness. If retail investors have the experience of identifying these strategies, they can battle them.

Nonetheless, downstream initiatives such as law enforcement intervention will have to do for now until these upstream measures make a difference. This could also mean damaging liquidity ramps so that the scammers can’t cash out of their holdings or starting with seizing the related accounts assuming the funds are on exchanges to redistribute their holdings to the victims of PlusToken.

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Photo credit: Bitcoin Magazine

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