Posted 2 years ago | by Bethany Armstrong

Cryptocurrency Suspects Alleged Chinese Ponzi Scheme

In 2018, PlusToken was created and promised high yield investment with the return percentages to their four tiers of members. By 2019, PlusToken claimed to have over 10 million members. The tiered structure mimics a classic Ponzi scheme outline.

The founding partner of Primitive Ventures is a blockchained-based investment company. Dovey Wan, is accusing PlusToken of a massive sell-off. Wan presents his information with significant details tracing wallet addresses like Bitcoin, Ether and EOS to be associated with PlusToken. Wan has called on cryptocurrency exchanges to blacklist PlusToken.

The Chinese police have been on the case and have shared that investors were allegedly scammed $3 billion dollars. Even though there has been a least one significant arrest by Chinese police, the case isn’t over. Due to the privacy and decentralization of cryptocurrency (which is often seen as an advantage for propelling cryptocurrency), it means that returning the funds in the PlusToken wallet to the 10 million investors is not as easy as if the funds had been removed from a bank account. Therefore, there is no way to guarantee that the investors will be compensated for the loss of investments.

An impressive flow chart from a security audit firm reveals investigative data that shows money flow from PlusToken’s wallet in July - the same month the sell-offs are suspected to have started. In recent days, there have been reported claims by Chinese investors that an unknown address has been dropping bitcoin into the Binance. Wan suspects this is an extension of the alleged scheme by PlusToken.

As a whole, PlusToken scheme is seen to be the largest single incident of crypto-related theft loss in 2019.