This is a serious case. Investors were scammed because they were promised of high investor's returns and profits. The reality is that, they are easily been hooked by those promises thus giving their whole trust with unsure projects because their main goal is to get what they have promised for-high returns of money.
And yeah, because of this ponzi scheme the crypto market is slightly suffering making this as a big issues in the internet and having this as a bad news will definitely dump current price of bitcoin.
Topic: $3B Ponzi Scheme is Dumping BTC by the Hundreds - page 2. (Read 573 times)
it is funny that nobody does a simple calculation to realize how fake these numbers that have been spreading by the news sites are.
here is what they are basically saying: "$3 billion dollar worth of bitcoin was sold and price only went down about 5% and came back up in less than 12 hours". so either bitcoin market grew ridiculously big overnight and we missed it that it could absorb this many coins sold without moving at all or the number was a big lie!
This news is seriously spreading like fire and I even read somewhere where it was categorically stated in there that the amount has been moved completely out of the system, and here we are, I did not see the effect of that massive dumping, even though it was claimed that they were moving it bit by bit. here is what they are basically saying: "$3 billion dollar worth of bitcoin was sold and price only went down about 5% and came back up in less than 12 hours". so either bitcoin market grew ridiculously big overnight and we missed it that it could absorb this many coins sold without moving at all or the number was a big lie!
It is confusing tough because when you see the rate bitcoin dumps sometimes, you will agree that someone somewhere is purposely manipulating the market with big amount of money, look at yesterday or so, the market suddenly plunge from $10600 to $10200 within a second, and how will there be a coordinated dumping if not because it was being dumped at once. The reason why I don’t want to completely believe the news is that there were claims that it has the involvement of china.
Quote
my understanding is that ponzi cant never profit in the long run
The profit cant result from a negative sum game. Options traders accept they might lose everything and that market overall returns less then all values input hence negative sum. It has a utility to society so it continues but ponzi relies on deception and with no use.
Its called a pyramid scheme quite often because the many feed the few at the top, the originators of the scheme benefit in the short term so long as new entrants are being bought into the economy of the scheme with the idea they are investing in something.
Many accuse BTC overall of being a scheme of this sort. There is utility to BTC that I believe would not exist to some people if it were not available and being something unique goes a long way to qualifying the existence of a product with demand. People are willing to pay up front for the use of BTC, I think thats the main difference where as with ponzi they are led to believe they dont have to do anything but contribute and will see all or more money returned. Quite often nothing is returned. So long as people accept there is no guarantee or innate interest or business growth with BTC its not a valid criticism.
It would have to be small though, like when it reaches 3 billion dollars you start to question how did they convince that many people or at least for that amount of money.
I know there has been bigger ponzi schemes in the world specially there was a case in wall street where a big known dude scammed 50+ billion dollars with a ponzi scheme however at the same time he got caught doing it not because he ran out of money to do it but because his filing reports didn't add up properly. Hell even Al Capone didn't go to jail for mafia related stuff, he did for tax evasion. Hence, stealing 3 billion dollars legaly is very difficult, how could you file the tax reports or how do you showcase people on document that you are a good company and not a scammer. Its very difficult.
I know there has been bigger ponzi schemes in the world specially there was a case in wall street where a big known dude scammed 50+ billion dollars with a ponzi scheme however at the same time he got caught doing it not because he ran out of money to do it but because his filing reports didn't add up properly. Hell even Al Capone didn't go to jail for mafia related stuff, he did for tax evasion. Hence, stealing 3 billion dollars legaly is very difficult, how could you file the tax reports or how do you showcase people on document that you are a good company and not a scammer. Its very difficult.
I had to help a brother who had been involved in 3 ponzi scam with bitcoin last month, my understanding is that ponzi cant never profit in the long run. Bitcoin makes it even more dangerous due to the anonymity involve and none of such organizers loses, in most cases they cant be prosecuted. The problem is some people wont ever learn, just like in gambling, such risk is fun. IMO the wrong opinion that ponzi brings to bitcoin is getting corrected and people are making better use of it than ponzi
it is funny that nobody does a simple calculation to realize how fake these numbers that have been spreading by the news sites are.
here is what they are basically saying: "$3 billion dollar worth of bitcoin was sold and price only went down about 5% and came back up in less than 12 hours". so either bitcoin market grew ridiculously big overnight and we missed it that it could absorb this many coins sold without moving at all or the number was a big lie!
here is what they are basically saying: "$3 billion dollar worth of bitcoin was sold and price only went down about 5% and came back up in less than 12 hours". so either bitcoin market grew ridiculously big overnight and we missed it that it could absorb this many coins sold without moving at all or the number was a big lie!
@exstasie. No, she might only have gotten very excited when she was beginning to suspect something, however, Blockchain analytics might not be for her hehehe.
This story begun when someone called Dovey Wan begun to suspect some large movement of bitcoins by some wallets and begun to spread ehat she has discovered in twitter.
Carlton Banks might be right and Dovey Wan might be wrong.
Carlton Banks might be right and Dovey Wan might be wrong.
Reading through the tweets again, I wonder if Dovey Wan (a venture capitalist) was just hyping up PeckShield. I had never even heard of them before that day. Of course, no proof of any of the claims ever emerged....just an unverifiable infographic from PeckShield.
However, where are the large amount of bitcoins going? Are they going to exchanges? How much has been sent to them? What are the exchanges not telling us? Are those coins frozen by exchanges?
Everything is pretty opaque to us because the scam took place in China/Korea. I can't even verify through multiple sources where the funds moved after the exit scam occurred. All roads lead back to Dovey Wan.
How do you really get scammed 3 billion dollars, why would anyone invest THAT much into something. Maybe they got funded lets say 100 million at most but the total supply of wan they have in their possession times the price of wan equals to 3 billion dollars?
It wasn't a typical ICO or something. It was a Ponzi scheme, like Bitconnect 2.0. Plus Token was paying out unsustainable profits on deposits to lure people in. As a result, thousands of people started using their custodial wallet (for BTC, ETH, EOS, others) as their normal wallet. That's how they accumulated so much crypto.
If the returns are too good to be true, sometimes you need to start doubting that program. Because more than likely, there are loopholes in the system and they are only luring potential users with good investment returns. I hope people who are responsible on this fraud will get what they deserve. Don't be so greedy because it will cost you a lot in return.
I would consider this as an HYIP scheme which was wrapped in a new avatar and presented to gullible investors, who failed to understand that this was a massive scam in the making. Whenever I read the words double or see any site offering extremely high interest rates I immediately shut down that site cause I know it’s a scam. Also will the investors be able to recover their money, what’s the latest news on this can anyone provide a update.
This story begun when someone called Dovey Wan begun to suspect some large movement of bitcoins by some wallets and begun to spread ehat she has discovered in twitter.
Carlton Banks might be right and Dovey Wan might be wrong. However, where are the large amount of bitcoins going? Are they going to exchanges? How much has been sent to them? What are the exchanges not telling us? Are those coins frozen by exchanges?
Many questions.
Carlton Banks might be right and Dovey Wan might be wrong. However, where are the large amount of bitcoins going? Are they going to exchanges? How much has been sent to them? What are the exchanges not telling us? Are those coins frozen by exchanges?
Many questions.
How do you really get scammed 3 billion dollars, why would anyone invest THAT much into something. Maybe they got funded lets say 100 million at most but the total supply of wan they have in their possession times the price of wan equals to 3 billion dollars?
It wasn't a typical ICO or something. It was a Ponzi scheme, like Bitconnect 2.0. Plus Token was paying out unsustainable profits on deposits to lure people in. As a result, thousands of people started using their custodial wallet (for BTC, ETH, EOS, others) as their normal wallet. That's how they accumulated so much crypto.
If the returns are too good to be true, sometimes you need to start doubting that program. Because more than likely, there are loopholes in the system and they are only luring potential users with good investment returns. I hope people who are responsible on this fraud will get what they deserve. Don't be so greedy because it will cost you a lot in return.
How do you really get scammed 3 billion dollars, why would anyone invest THAT much into something. Maybe they got funded lets say 100 million at most but the total supply of wan they have in their possession times the price of wan equals to 3 billion dollars?
It wasn't a typical ICO or something. It was a Ponzi scheme, like Bitconnect 2.0. Plus Token was paying out unsustainable profits on deposits to lure people in. As a result, thousands of people started using their custodial wallet (for BTC, ETH, EOS, others) as their normal wallet. That's how they accumulated so much crypto.
ALLEGEDLY
even the contelegraph headline stipulates that condition
there is zero proof that this is happening
News outlets becoming worst as years goes by.They do put up headlines or news with having that "alleged" so its not something being proved out.even the contelegraph headline stipulates that condition
there is zero proof that this is happening
Overall about Ponzi scheme or scams,its never been a new thing and we wouldn't know if there are some projects do lost even more with those numbers mentioned.
How do you really get scammed 3 billion dollars, why would anyone invest THAT much into something. Maybe they got funded lets say 100 million at most but the total supply of wan they have in their possession times the price of wan equals to 3 billion dollars?
They are printing their own money anyway so it would be totally possible that their crypto portfolio all together could worth 3 billion and not the money they took from the investors. If I am wrong and they actually got funded 3 billion dollars then I am wondering what the hell were people thinking Wan would accomplish with it? What makes a company NEED 3 billion dollars that they can actually spend on and get better?
If I have 3 billion than it is enough to keep the price of Wan high as long as possible and even if you end up putting a buy order on a decent price you can just collect it all back with some left over cash and you got free money.
They are printing their own money anyway so it would be totally possible that their crypto portfolio all together could worth 3 billion and not the money they took from the investors. If I am wrong and they actually got funded 3 billion dollars then I am wondering what the hell were people thinking Wan would accomplish with it? What makes a company NEED 3 billion dollars that they can actually spend on and get better?
If I have 3 billion than it is enough to keep the price of Wan high as long as possible and even if you end up putting a buy order on a decent price you can just collect it all back with some left over cash and you got free money.
I have seen this news around the internet and I don’t know it was this serious, but at this stage now, I don’t think it should be really difficult to spot a Ponzi scheme out. Many of the participant knew that it was a Ponzi scheme and yet they still put their money into it, now the deed is done, and everyone is trying to associate it to bitcoin, this is never bitcoin issue, it would have also been done through fiat, but unfortunately if the story is true, it will only affect bitcoin a little bit.
Affecting it in the sense that removing about 3 billion dollars from the market now would not be much healthy, now that we are hoping to get more money that will make the bitcoin easily and quickly reach its bull run, well, I hope that it would not affect it that much since they are dumping it gradually and not suddenly.
Affecting it in the sense that removing about 3 billion dollars from the market now would not be much healthy, now that we are hoping to get more money that will make the bitcoin easily and quickly reach its bull run, well, I hope that it would not affect it that much since they are dumping it gradually and not suddenly.
Why does a ETH token affect BTC so greatly, the news could be real and the selling even but I dont see its especially a long term effect. Theres always a story to accompany selling but I always place the graph first and the story on the charts first formed a long time before this story. Its due some selling and this is just the headline that runs alongside that selling pressure taking place.
If theres actual news concerning this protocol and its continuation then its big, actually new and deserves genuine examination. The idea people in the world can be dishonest and others misled was not news thousands of years ago nevermind now, sorry it happened but theres bigger negatives in the world I'm sure.
The biggest finance corruption in our economies is trillions big and generational in effect.
If theres actual news concerning this protocol and its continuation then its big, actually new and deserves genuine examination. The idea people in the world can be dishonest and others misled was not news thousands of years ago nevermind now, sorry it happened but theres bigger negatives in the world I'm sure.
Quote
This is so disappointing imo another scheme and a big one at that
The biggest finance corruption in our economies is trillions big and generational in effect.
The image in this article shows the movement of money from addresses which is pretty crazy. Movements of 50-100 BTC batches appear to move into exchanges.
is there any proof of this? i read the ciphertrace report and it says nothing about that. the only thing i see is this tweet storm, where the claims about 50-100 BTC batches seem to be unsourced. all the activity on those two large addresses she posted ended in may/july so we need a more comprehensive analysis to verify.
I agree, I saw some articles around and they used the word "allegedly". So again we really need to be careful, I'm not saying that DoveyWan is wrong, or it could be another FUD news coming from China since they have hinted that they are going to create their own native token? Good thing though, the price has bounce back today, and as others may contributed the flash crash of Bitcoin to this news, it has a short term effect. So let's see how this whole drama unfolds again, specially it involves Chinese government.
The image in this article shows the movement of money from addresses which is pretty crazy. Movements of 50-100 BTC batches appear to move into exchanges.
is there any proof of this? i read the ciphertrace report and it says nothing about that. the only thing i see is this tweet storm, where the claims about 50-100 BTC batches seem to be unsourced. all the activity on those two large addresses she posted ended in may/july so we need a more comprehensive analysis to verify.
I went and read CipherTrace's report to see if I could find more on this story.
This is what I found
This is what I found
Well this makes things more clear, thanks for bringing this report in. So, rather than simple Ponzi its an exit scam? Kim Jung Un huh? Not a fan of these mobile apps, especially closed source wallets...
And what will be the community reaction about these coins? Accept them like nothing? Freeze them? Well if this turns out to be true since it appears to need confirmation...
PS: Found the source, your text is missing more:
2019 the Year of the Exit Scam
Massive PlusToken Wallet Ponzi Scheme Impacts 2.4 Million Users
US$2.9 billion worth of deposits appear to have been lost when Chinese police broke up an alleged Ponzi scheme involving the purportedly South Korea-based crypto wallet and exchange, PlusToken. It is unknown how many people were affected, but PlusToken claimed to have between 2.4 and 3 million users/investors. CipherTrace has not definitively confirmed this apparent fraud or exit scam. The details of who was behind PlusToken and where its custodial funds went are currently shrouded in a mystery involving Chinese nationals, Chinese police, the government of Vanuatu, and the two supposed co-founders—a Russian known only as “Leo” and South Korean who uses the name “Kim Jung Un.” If confirmed, it would be the largest such loss ever, dwarfing even the US$600 million exit scam pulled off last year in Vietnam (See CipherTrace Q3 2018 Cryptocurrency AML Report).
The wallet required users to download an app through which they could deposit crypto and also invest in PlusToken (PLUS). The company claimed the PlusToken coin, which is based on the Ethereum blockchain was developed by the core team of a major technology company. The wallet reportedly held Bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP, DOGE coin, Dash coin, and PLUS coin (the native cryptocurrency of Plus Token). Users accessed the wallet through a mobile app and could trade online at the PlusToken exchange website, pstoex.com. Both were not functioning at the time of this report. However, a copy of the whitepaper is still on LinkedIn
https://www.slideshare.net/ArnoBalzer/white-paper-plus-token.
A Crypto High Yield Investment Product Popular in Asia
PlusToken appears to have been a popular in Japan, South Korea and China, and the company claimed it would have 10 million users by July 2019. Typical of a HYIP (High Yield Investment Product), the astounding user growth (if they truly had some 3 million users) stemmed from advertising huge returns. Specifically, PlusToken and its affiliates claimed that even in weak crypto market by using arbitrage among various cryptocurrencies (enabled by a bot called AI-Dog) and cloud crypto mining they could deliver wallet holders an ROI of between 8 and 16 percent each month, which was paid out in PLUS. Users were required to deposit a minimum of US$500 worth of crypto assets to participate.
PlusToken members could also make money by bringing new users into a multi-level marketing program typical of a pyramid scheme. In fact, new users could only join by through invitation from an existing PlusToken holder. However, it appeared there was no verifiable source of business revenue other than proceeds from new membership.
Meeting with Prince Charles Lends Credibility
All of this led to multiple warnings in the crypto community that PlusToken was a scam. The company’s founder publically dismissed those reports. However, after a company press release, replete with photos, claimed that on February, 2019 Leo had met with England’s Prince Charles at an Invest in Futures event hosted by the prince’s charitable foundation, PlusToken gained some newfound credibility. “Leo and Prince Charles had intimate talks on how the blockchain serves economic society, according to a press release promoting a new PlusToken exchange. Also, he put forward valuable advice on the development of future blockchain-related bills issue in the UK. Besides, Leo donated at the charity dinner generously and won a lot of complement.”
With today’s potential for deep fake photos, CipherTrace researchers reached out to the Prince Charles Foundation to validate the authenticity of the photos. The Foundation confirmed “Leo” had in fact attended the dinner, however staff were not willing to provide other information, such as his last name, due to concerns over the GDPR.
On June 28, 2019, Chinese police arrived on Vanuatu and arrested the “Plus Token Six” for running an “internet scam.” The Island’s government allowed China to almost immediately extradite the six—who were either Vanuatu citizens or applying for citizenship—back to the mainland.
Alarm Bells Go Off in June as “Technical Difficulties” Prevent Users from Withdrawing Funds
In late June, PlusToken users began to experience trouble withdrawing custodial crypto assets. On June users found that withdrawals on the PlusToken app were frozen due to alleged “technical difficulties,” but by June 29 the PlusToken app had completely shut down due to alleged “system maintenance.” This caused great concern among the PlusToken Community.
“The PlusToken Six”
Also on June 29, Hong Kong’s leading newspaper, the South China Morning Post, reported that six Chinese nationals wanted by Beijing for operating an internet scam were arrested on the Pacific island of Vanuatu and extradited back to China. Vanuatu law enforcement and immigration authorities along with Chinese police raided a property where the six were conducting their operation. Subsequently the Chinese tech news agency 36Kr claimed to confirm that the “internet scam” reported by the Post was, in fact, PlusToken. Specifically, the arrests were for running a multi-level marketing company (pyramid scheme). As reported by the New York Times, China has been making a major crackdown on such business models, including Amway and Herbalife.
On July 12, a PlusToken community website responded to the incident, claiming the six arrested in China were PlusToken users and not associated with the company, and “Thus, no need bother about this rumors (sic).” The statement further claims that withdrawals remain restricted because the server is still unstable and urges users to wait “until server synchronization and stabilization” and not to worry if they cannot log in because its technical team is trying to recover the server and data. The statement then asks users to stop trying to log in until they receive confirmation that the severs are back up.
This was not the first time PlusToken has warned users not to believe “rumors.” In October 2018, after news started circulating in China that PlusToken was being investigated for violating Chinese regulations and engaging in fraudulent activity, the company’s co-founder, Leo, posted a video on YouTube https://www.youtube.com/watch?v=r3RTwNvgMu8 shot in his “hometown” of Kazan, Russia, telling users to “not pay attention to any haters.”
On July 10, China’s Yuncheng Public Security Bureau told the Daily Planet Daily that the case is still under investigation and that there are suspects that have since fled. As of the release of this report, Plus Token’s official site, pltoken.io, also appears to be down with the last archive in archive.org occurring on July 1, 2019.
The case has even raised political concerns in the South Pacific, Australia and New Zealand regarding the increasing influence of China. The local newspaper reported that the rapid extradition of people who were either citizens of Vanuatu or applying for citizenship showed how the government bent to the will of the Chinese, and may have confirmed fears that Chinese intelligence was operating covertly in the country. “When they arrived in Vanuatu, Chinese law enforcement provided critical information to Vanuatu police concerning the PlusToken scammers. They not only knew their names; they knew where they lived,” said a report in Vanuatu’s Daily Post.
This also raises issues for international regulators and cryptocurrency users as to the 3-billion-dollar question: there is no word from the Chinese authorities on the fate of the missing user funds. Certainly this “exit scam” warrants further investigation, because unlike similar cryptocurrency frauds, it is not clear that insiders made off with the loot. CipherTrace will provide updates if available in next quarter’s report.
On July 12, PlusToken responded to the incident on its website, claiming the six Chinese nationals arrested in Vanuatu were PlusToken users and not associated with the company, and “Thus, no need bother about this rumors [sic].” (See screenshot above). The statement further claims that withdrawals remain restricted because the server is still unstable and urges users to wait “until server synchronization and stabilization” and not to worry if they cannot log in because its technical team is trying to recover the server and data. The statement then asks users to stop trying to log in until they receive confirmation that the severs are back up. As of now there are no further updates.
Massive PlusToken Wallet Ponzi Scheme Impacts 2.4 Million Users
US$2.9 billion worth of deposits appear to have been lost when Chinese police broke up an alleged Ponzi scheme involving the purportedly South Korea-based crypto wallet and exchange, PlusToken. It is unknown how many people were affected, but PlusToken claimed to have between 2.4 and 3 million users/investors. CipherTrace has not definitively confirmed this apparent fraud or exit scam. The details of who was behind PlusToken and where its custodial funds went are currently shrouded in a mystery involving Chinese nationals, Chinese police, the government of Vanuatu, and the two supposed co-founders—a Russian known only as “Leo” and South Korean who uses the name “Kim Jung Un.” If confirmed, it would be the largest such loss ever, dwarfing even the US$600 million exit scam pulled off last year in Vietnam (See CipherTrace Q3 2018 Cryptocurrency AML Report).
The wallet required users to download an app through which they could deposit crypto and also invest in PlusToken (PLUS). The company claimed the PlusToken coin, which is based on the Ethereum blockchain was developed by the core team of a major technology company. The wallet reportedly held Bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP, DOGE coin, Dash coin, and PLUS coin (the native cryptocurrency of Plus Token). Users accessed the wallet through a mobile app and could trade online at the PlusToken exchange website, pstoex.com. Both were not functioning at the time of this report. However, a copy of the whitepaper is still on LinkedIn
https://www.slideshare.net/ArnoBalzer/white-paper-plus-token.
A Crypto High Yield Investment Product Popular in Asia
PlusToken appears to have been a popular in Japan, South Korea and China, and the company claimed it would have 10 million users by July 2019. Typical of a HYIP (High Yield Investment Product), the astounding user growth (if they truly had some 3 million users) stemmed from advertising huge returns. Specifically, PlusToken and its affiliates claimed that even in weak crypto market by using arbitrage among various cryptocurrencies (enabled by a bot called AI-Dog) and cloud crypto mining they could deliver wallet holders an ROI of between 8 and 16 percent each month, which was paid out in PLUS. Users were required to deposit a minimum of US$500 worth of crypto assets to participate.
PlusToken members could also make money by bringing new users into a multi-level marketing program typical of a pyramid scheme. In fact, new users could only join by through invitation from an existing PlusToken holder. However, it appeared there was no verifiable source of business revenue other than proceeds from new membership.
Meeting with Prince Charles Lends Credibility
All of this led to multiple warnings in the crypto community that PlusToken was a scam. The company’s founder publically dismissed those reports. However, after a company press release, replete with photos, claimed that on February, 2019 Leo had met with England’s Prince Charles at an Invest in Futures event hosted by the prince’s charitable foundation, PlusToken gained some newfound credibility. “Leo and Prince Charles had intimate talks on how the blockchain serves economic society, according to a press release promoting a new PlusToken exchange. Also, he put forward valuable advice on the development of future blockchain-related bills issue in the UK. Besides, Leo donated at the charity dinner generously and won a lot of complement.”
With today’s potential for deep fake photos, CipherTrace researchers reached out to the Prince Charles Foundation to validate the authenticity of the photos. The Foundation confirmed “Leo” had in fact attended the dinner, however staff were not willing to provide other information, such as his last name, due to concerns over the GDPR.
On June 28, 2019, Chinese police arrived on Vanuatu and arrested the “Plus Token Six” for running an “internet scam.” The Island’s government allowed China to almost immediately extradite the six—who were either Vanuatu citizens or applying for citizenship—back to the mainland.
Alarm Bells Go Off in June as “Technical Difficulties” Prevent Users from Withdrawing Funds
In late June, PlusToken users began to experience trouble withdrawing custodial crypto assets. On June users found that withdrawals on the PlusToken app were frozen due to alleged “technical difficulties,” but by June 29 the PlusToken app had completely shut down due to alleged “system maintenance.” This caused great concern among the PlusToken Community.
“The PlusToken Six”
Also on June 29, Hong Kong’s leading newspaper, the South China Morning Post, reported that six Chinese nationals wanted by Beijing for operating an internet scam were arrested on the Pacific island of Vanuatu and extradited back to China. Vanuatu law enforcement and immigration authorities along with Chinese police raided a property where the six were conducting their operation. Subsequently the Chinese tech news agency 36Kr claimed to confirm that the “internet scam” reported by the Post was, in fact, PlusToken. Specifically, the arrests were for running a multi-level marketing company (pyramid scheme). As reported by the New York Times, China has been making a major crackdown on such business models, including Amway and Herbalife.
On July 12, a PlusToken community website responded to the incident, claiming the six arrested in China were PlusToken users and not associated with the company, and “Thus, no need bother about this rumors (sic).” The statement further claims that withdrawals remain restricted because the server is still unstable and urges users to wait “until server synchronization and stabilization” and not to worry if they cannot log in because its technical team is trying to recover the server and data. The statement then asks users to stop trying to log in until they receive confirmation that the severs are back up.
This was not the first time PlusToken has warned users not to believe “rumors.” In October 2018, after news started circulating in China that PlusToken was being investigated for violating Chinese regulations and engaging in fraudulent activity, the company’s co-founder, Leo, posted a video on YouTube https://www.youtube.com/watch?v=r3RTwNvgMu8 shot in his “hometown” of Kazan, Russia, telling users to “not pay attention to any haters.”
On July 10, China’s Yuncheng Public Security Bureau told the Daily Planet Daily that the case is still under investigation and that there are suspects that have since fled. As of the release of this report, Plus Token’s official site, pltoken.io, also appears to be down with the last archive in archive.org occurring on July 1, 2019.
The case has even raised political concerns in the South Pacific, Australia and New Zealand regarding the increasing influence of China. The local newspaper reported that the rapid extradition of people who were either citizens of Vanuatu or applying for citizenship showed how the government bent to the will of the Chinese, and may have confirmed fears that Chinese intelligence was operating covertly in the country. “When they arrived in Vanuatu, Chinese law enforcement provided critical information to Vanuatu police concerning the PlusToken scammers. They not only knew their names; they knew where they lived,” said a report in Vanuatu’s Daily Post.
This also raises issues for international regulators and cryptocurrency users as to the 3-billion-dollar question: there is no word from the Chinese authorities on the fate of the missing user funds. Certainly this “exit scam” warrants further investigation, because unlike similar cryptocurrency frauds, it is not clear that insiders made off with the loot. CipherTrace will provide updates if available in next quarter’s report.
On July 12, PlusToken responded to the incident on its website, claiming the six Chinese nationals arrested in Vanuatu were PlusToken users and not associated with the company, and “Thus, no need bother about this rumors [sic].” (See screenshot above). The statement further claims that withdrawals remain restricted because the server is still unstable and urges users to wait “until server synchronization and stabilization” and not to worry if they cannot log in because its technical team is trying to recover the server and data. The statement then asks users to stop trying to log in until they receive confirmation that the severs are back up. As of now there are no further updates.
I went and read CipherTrace's report to see if I could find more on this story.
This is what I found
"US$2.9 billion worth of deposits appear to have been lost when Chinese police broke up an alleged Ponzi scheme involving the purportedly South Korea-based crypto wallet and exchange, PlusToken. It is unknown how many people were affected, but PlusToken claimed to have between 2.4 and 3 million users/investors. CipherTrace has not definitively confirmed this apparent fraud or exit scam. The details of who was behind PlusToken and where its custodial funds went are currently shrouded in a mystery involving Chinese nationals, Chinese police, the government of Vanuatu, and the two supposed co-founders—a Russian known only as “Leo” and South Korean who uses the name “Kim Jung Un.” If confirmed, it would be the largest such loss ever, dwarfing even the US$600 million exit scam pulled off last year in Vietnam (See CipherTrace Q3 2018 Cryptocurrency AML Report).
The wallet required users to download an app through which they could deposit crypto and also invest in PlusToken (PLUS). The company claimed the PlusToken coin, which is based on the Ethereum blockchain was developed by the core team of a major technology company. The wallet reportedly held Bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP, DOGE coin, Dash coin, and PLUS coin (the native cryptocurrency of Plus Token). Users accessed the wallet through a mobile app and could trade online at the PlusToken exchange website, pstoex.com. Both were not functioning at the time of this report. However, a copy of the whitepaper is still on LinkedIn
https://www.slideshare.net/ArnoBalzer/white-paper-plus-token."
This is what I found
"US$2.9 billion worth of deposits appear to have been lost when Chinese police broke up an alleged Ponzi scheme involving the purportedly South Korea-based crypto wallet and exchange, PlusToken. It is unknown how many people were affected, but PlusToken claimed to have between 2.4 and 3 million users/investors. CipherTrace has not definitively confirmed this apparent fraud or exit scam. The details of who was behind PlusToken and where its custodial funds went are currently shrouded in a mystery involving Chinese nationals, Chinese police, the government of Vanuatu, and the two supposed co-founders—a Russian known only as “Leo” and South Korean who uses the name “Kim Jung Un.” If confirmed, it would be the largest such loss ever, dwarfing even the US$600 million exit scam pulled off last year in Vietnam (See CipherTrace Q3 2018 Cryptocurrency AML Report).
The wallet required users to download an app through which they could deposit crypto and also invest in PlusToken (PLUS). The company claimed the PlusToken coin, which is based on the Ethereum blockchain was developed by the core team of a major technology company. The wallet reportedly held Bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP, DOGE coin, Dash coin, and PLUS coin (the native cryptocurrency of Plus Token). Users accessed the wallet through a mobile app and could trade online at the PlusToken exchange website, pstoex.com. Both were not functioning at the time of this report. However, a copy of the whitepaper is still on LinkedIn
https://www.slideshare.net/ArnoBalzer/white-paper-plus-token."
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