Chinese authorities seize $4.2 billion in cryptocurrency

In a recent investigation, Chinese journalist Colin Wu revealed details about PlusToken, one of the largest cryptocurrency Ponzi schemes in history. According to Wu, Chinese authorities have seized a significant amount of digital assets from the PlusToken team, which was run by a man with a secondary education from Changsha. The team managed to amass 310,000 Bitcoin (BTC), 9.17 million Ethereum (ETH) and over 51 million EOS using a simple Ponzi and pyramid scheme model.

Chinese police confiscated 190,000 BTC, 830,000 ETH and 27.24 million EOS. Some of these assets were sold through Beijing Zhifan Technology, a company similar to US firm Chainalysis. However, the fate of the remaining assets remains unclear. Wu and another source, Jiang Zhuoer, suggest that most of the seized BTC was sold between late 2019 and mid-2020, when BTC prices fluctuated between $7,000 and $12,000.

Foreign analysts tracking PlusToken addresses believe that while the majority of Bitcoins have been sold through the Huobi platform, there may still be about 15,000 BTC to be sold. They also assume that the Ethereum addresses have remained the same. Wu noted that there may be a discrepancy between the addresses identified by the police and those recorded by foreign observers.

In 2019, users of the PlusToken cryptocurrency wallet lost $3 billion after the project's leaders absconded with their funds. The platform was launched in 2018 and promoted as a decentralized international project developed by a South Korean team. It was aimed at Asian and European countries and offered investors guaranteed monthly payments of 6% to 19% and bonuses to attract new participants.

In March 2019, police in the southern province of Hunan launched an investigation into the PlusToken Ponzi scheme. Since then, the head of the Chinese division, Chen Bo, and five other Chinese nationals associated with the project have been on the run. In July 2020, Chinese police arrested 27 main suspects and 82 key participants in the PlusToken cryptocurrency pyramid scheme.

In November 2020, it was reported that Chinese authorities had seized $4.2 billion in cryptocurrency from the financial pyramid PlusToken. The government plans to sell it and send the profits to the state treasury.

Despite the recent crackdown on cryptocurrency-related activities by the People's Bank of China, the country remains a major player in the cryptocurrency industry. It provides a significant portion of the total hashrate of the major coin networks and is home to the largest companies that produce mining rigs.