In the last couple of days, BTC has been under immense selling pressure. The digital asset has gradually shed value leaving many questioning when this will end. Some believe bitcoin, and cryptocurrencies in general, are plummeting due to the growing economic tensions. Dovey Wan, a popular analyst of Chinese markets and the founding partner of Primitive Crypto, has an unexpected explanation.
She implies that this sell-off is prompted by a chaotic Chinese Ponzi scheme, PlusToken. If she’s right, her recent revelations will help many make sense of the recent pullback that has seen bitcoin dropping below the $10k key support.
PlusToken Has Reportedly Pilfered 200k BTC And 800k ETH
Dovey took to twitter to give information about this alleged Ponzi scheme in a tweet thread, urging her followers to spread the information for action to be taken on the scam “before it’s too late”.
Wan noted that Plus Token, which has since collapsed, still has some control over a large stash of cryptocurrencies and has been sending some of these amounts to various exchanges such as Binance, Huobi, and Bittrex in its quest to launder the remaining crypto by sending the coins to multiple wallet addresses:
“Many of their BTC addresses are started with P2SH which commonly used for multi-sig, most likely some people who hold the keys are not being caught hence police can’t unlock the wallet. For EOS/ETH wallet can be diff case but so far police was not able to touch any of those.”
Wan then notes that this bitcoin dump started in early July. She opined:
“A security audit firm Peckshield has done a graph analysis of the money flow from Plus Token’s wallet in early July, and figured about total -1000 has gone into Bitrrex and Huobi. So basically the sell-off started around early July.”
PlusToken’s Activities Round-up
Plus Token started in mid-2018 with a cryptocurrency wallet that promised high returns to the users on all their invested crypto. A year later, reports claimed that Plus Token had made away with more than $3 billion worth of users funds shortly after these users complained about being unable to access their funds from their Plus Token wallets. Two months ago, six individuals of Chinese nationality were arrested in connection to this scam.
Presently, Wan suggests some members of this Ponzi who are yet to be caught “are moving their funds into small batches into exchanges, like 50- 100 BTC per batch”.
“I couldn’t find the chat but starting a few days ago, Chinese traders are saying someone has been dumping 100BTC non-stop on Binance, will post here once I find the chat detail,” she added.
Cryptocurrency Exchanges Are Unaware Of This Massive Crypto Dump?
Cryptocurrency exchanges are oblivious to the ongoing shakedown as Dovey Wan remarks. She mentions that what could turn out to be the greatest scam of all time is unknown to crypto exchanges, owing to the Chinese regulators keeping mum about it.
According to Wan:
“Reasons why exchanges are not paying attention to the 200k $BTC scam Plus Token
- It’s not known outside China
- Chinese exchanges didn’t do anything as its “closed” by police
- Chinese police didn’t work with exchanges as crypto exchanges are not legal in China.”