Key Points
- Chinese authorities confiscated a substantial quantity of digital assets from PlusToken, a notorious cryptocurrency Ponzi scheme.
- While some of the seized cryptocurrency was sold, the fate of the remaining assets remains uncertain.
Chinese journalist Colin Wu conducted a detailed investigation into PlusToken, considered one of the most significant cryptocurrency scams in history.
The Chinese government reportedly seized a large number of digital assets from the PlusToken team, which was led by a man with only a middle school education from Changsha.
Ponzi Scheme Details
The team successfully raised 310,000 Bitcoin (BTC), 9.17 million Ethereum (ETH), and over 51 million EOS by employing a straightforward Ponzi scheme and pyramid scheme model.
Wu reported that some of the confiscated cryptocurrency was sold via Beijing Zhifan Technology, a company akin to the American Chainalysis. However, the status of the remaining assets is still unknown.
Asset Sales and Remaining Cryptocurrency
Wu and another source, Jiang Zhuoer, suggest that most of the confiscated BTC were sold between late 2019 and mid-2020 when BTC prices ranged between $7,000 and $12,000.
However, the destiny of the remaining assets is still unclear. Analysts tracking PlusToken addresses believe that while most Bitcoins have been sold through the Huobi platform, about 15,000 BTC may still need to be sold.
In 2019, PlusToken users lost $3 billion when the project leaders absconded with their funds. The platform, which started in 2018, was marketed as a decentralized international project developed by a South Korean team.
Investigation into PlusToken
In March 2019, an investigation was launched into the PlusToken Ponzi scheme by police in the southern province of Hunan. Chen Bo, the head of the Chinese division, and five other Chinese citizens associated with the project have been on the run since then.
In July 2020, Chinese police detained 27 primary suspects and 82 key participants in the PlusToken cryptocurrency pyramid scheme.
Confiscated Assets Sales
In November 2020, it was revealed that Chinese authorities had seized $4.2 billion worth of cryptocurrency from the PlusToken financial pyramid. The government plans to sell it and send the profits to the state treasury.
Despite the complete ban of cryptocurrency mining in 2021, China continues to be a significant player in the cryptocurrency industry. According to data provided by CCAF experts, mainland China’s share in the world hashrate is 21.11%, only 10% less than the June 2021 figures.
The largest companies producing mining equipment, including Bitmain and the Antminer series devices, MicroBT from WhatsMiner, and miners from Innosilicon, AGM, Canaan, and Ebang, are also located in China.
