A number of masterminds of the Plustoken scam were sentenced to 11 years in prison for defrauding cryptocurrency investors. Last week, on Nov. 19, a court ruling had revealed that the Chinese government had said it seized more than $ 4 billion in crypto assets in the Plustoken scam. Meanwhile, on-chain sleuths believe the Chinese government may have already sold a large number of the coins and simply added the proceeds to the central treasury.
Plustoken Masterminds sentenced to up to 11 years in prison
New information from the South China Morning Post (SCMP) indicates that some of the Plustoken gang leaders have been sentenced to prison for their actions. The court ruling had previously detailed the seized assets that came from seven members of the Plustoken gang.
The SCMP report indicates that the multi-level marketing (MLM) crypto scam was originally invoked in 2018 by a person named Chen Bo. The project promised high returns and attracted millions of participants until the project leaders were ripped off in mid-2019.
The report also reveals that Chen and his colleagues used social media and meetups to lure victims to the project. Plustoken members promised members a return of up to 18% for an arbitration company that never actually existed. Chen and other top MLM gang leaders managed to attract 3,200 investors and nearly three million Plustoken members at the height of its popularity.
Onchain research indicates that the Bitcoin stock was likely sold last year
Now in the crypto world, many proponents aren’t too concerned about the logistics of how the Plustoken scammers have cheated cryptocurrency investors. That part of the story is clear as the world watched the Plustoken scam unfold like many other pyramid schemes. The main concern, even before the masterminds were taken into custody, is what happened to the crypto assets that the scammers obtained from the victims.
The court’s indictment tells the public that the illegal proceeds from the Plustoken scam “will be processed in accordance with the law and the proceeds and profits will be forfeited to the national treasury”. However, @Ergobtc a researcher of OXT research, has shared information about the stolen coins and those active in blockchain analysis are believed to have sold the coins in the open market.
OXT Research recently launched a special report on the topic after the team studied the onchain action. In addition, the researchers estimate that the Plustoken premium was a whopping 200,966 after closing BTC ($ 3.8 billion). Most of the latest reports on the Plustoken scam have not told the story of Ergo and OXT Research as many assume the Chinese government still has these coins. Ergo has followed the Plustoken addresses extensively and he has detailed that the coins were also mixed before they were sold.
The study claims 20,000 BTC ($ 382 million) were mixed through the Wasabi wallet and over 150,000 BTC ($ 2.8 billion) were mixed through a very simple process. OXT researchers call ‘self-shuffling’. It is believed that most of the coins were sold last year after being mixed and whoever sold them had seemingly used the Huobi exchange.
Many sales have reportedly started in mid-2019, all the way to the end of the year. Additionally, regional reporter and crypto blogger Colin Wu has also tweeted about the fact that the Chinese government has likely sold the coins for fiat.
“The Chinese government has confiscated 190,000 people BTC and 830,000 ETH from the Plustoken MLM case, worth billions of dollars in total, ”Wu tweeted. The official announcement seems to indicate that the government has sold it and has returned to the central treasury administered by the central bank. The local reporter added:
We currently don’t know how the Chinese government is selling [this] crypto, and whether they are exchanged for CNY or USD. But Chinese exchanges like Huobi have a good relationship with the police, they will provide assistance if the police ask for it.
Governments are seizing more assets of crypto assets these days
Ergo also tweeted about Chen Bo’s collaboration with the police. Let me make this clear, Chen Bo, the mastermind of PlusToken (arrested June 2019), was charged with selling Plustoken’s BTC, through a third party, on behalf of the CCP? “Ergo said. In return he gets alone [eight] years in the gulag to design a billion [dollar] Ponzi? ” the researcher asked.
Ergo has also discussed the news that the Chaindigg company was used to remove the coins from the Ponzi and that there may also be a connection to the Wotoken scam tokens. Wotoken was a similar pyramid scheme and it has been suggested that the masterminds of Wotoken and Plustoken were somehow connected.
Last October, news.Bitcoin.com reported about the Wotoken masterminds who were sentenced to imprisonment because the Intermediate People’s Court of Yancheng City, Jiangsu Province, rejected the convicts’ appeal. After showing some token charts of the Wotoken coin transactions, Ergo too wondered:
Does this mean that Chaindigg was also responsible for handling Wotoken coins? This would explain why the coins were tossed in the same algo.
The OXT researcher too asked whether “western regulators” would track these transactions or not.
Governments today handle much more large amounts of seized digital assets, and the Chinese Communist Party (CCP) is believed to have been one of the largest bitcoin holders last year. The news also follows recent news from the US government Seizure of bitcoins on Silk Road when they seized about 69,370 BTC, BCH, BSVand BTG.
Ergo’s findings indicate that the CCP has sold the digital assets, suggesting that most of the sales are over. The researcher’s statistics show that there are about 15,000 of them BTC stay while about 170k BTC was reportedly sent to known digital switch addresses.
What do you think of the Plustoken study and the onchain findings? Let us know what you think about this topic in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, OXT Research, Twitter,
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