According to blockchain research group Chainalysis, Monday’s huge crypto sell-off could have been caused by PlusToken scammers dumping stolen funds – and it’s believed the group still has 20,000 BTC to sell.
PlusToken was a Chinese cryptocurrency Ponzi scheme which posed as a cryptocurrency wallet.
Users were encouraged to buy ‘PLUS’ tokens using BTC or ETH. The tokens promised a high rate of return with a maximum price of $350 per token.
It was claimed that PlusToken would generate income through mining activities, exchange profits, and affiliate referrals. Instead, PlusToken operated as a pyramid scheme.
Earlier this year, PlusToken pulled an exit scam, taking a staggering $2.9 billion in crypto funds.
Six of the masterminds behind PlusToken were arrested in June this year. However, the stolen funds haven’t been successfully seized by Chinese authorities – and according to Chainalysis, the funds are still on the move.
To obfuscate the location of the stolen crypto, PlusToken scammers who are still at large are using crypto mixers and over-the-counter (OTC) brokers in an attempt to launder funds.
As a result, some are now speculating that PlusToken’s dumping of tokens coincides with the bearish movement of BTC in the last few months.
In total, Chainalysis tracked 180,000 BTC, 6.4 million ETH, 111,000 USDT, and 53 OMG to the scam.
Of this, Chainalysis has tracked 45,000 BTC and 800,000 ETH. The majority of the Ether remains untouched, with fraudsters only able to cash out 10,000 ETH.
However, more than 25,000 BTC has already been cashed out, and the other 20,000 is spread across 8,700 crypto addresses. OTC brokers operating on Huobi have been identified as trading the stolen funds, perhaps unknowingly.
Chainalysis argues that it’s entirely possible that this group of scammers is responsible for driving down the price of Bitcoin over the recent weeks, and could be behind yesterday’s dramatic crash in price.
In total, the PlusToken fraudsters have cashed out $185 million in Bitcoin. Chainalysis identified that the start of the Bitcoin selling pressure coincided with a major cash-out by the PlusToken scammers in early October.
Whilst the researchers at Chainalysis are quick to state that these PlusToken cash-outs aren’t necessarily the cause of the major selling pressure we’ve seen in the last few months, there’s certainly a strong correlation between BTC price volatility and PlusToken transfers to Huobi OTC brokers.