The PlusToken scam was one of the most severe in the crypto industry. However, it appears that some of its operators have started getting their comeuppance. Yesterday, local industry news source ChainNews reported that up to 27 of the company’s operators had been arrested and taken into custody.
PlusToken’s Extensive Rap Sheet
The news report explained that the arrest was carried out by Chinese police authorities. While it didn’t highlight whether the Chinese police had collaborated with any additional law enforcement agencies, it confirmed that they were also investigating a further 82 core members.
As explained earlier, the PlusToken scam was one of the crypto spaces biggest. The company launched in 2018, posing as a wallet service and investment platform. It offered customers some juicy monthly returns, and the company soon managed upwards of $3 billion in a few short months.
However, the company was soon unable to keep up with its commitments. When its fraudulent nature got revealed, the hunt began for its officials. Eventually, sources claimed that PlusToken stole up to 180,000 BTC, 6.4 million ETH, 53 OMG, and 110,000 USDT tokens from its investors. The value of all holdings at the time equated to about $2.9 billion.
Disrupting the Market
Even with its reputation tattered, PlusToken managed to keep operating. However, crypto community members soon began noticing that the company’s wallets started to move money around vigorously. Late last year, market research firm Chainalysis reported that it had tracked about 45,000 BTC (worth about $302 million at the time) and 80,000 ETH (another $102 million) that the company sent from its wallets to some individual addresses.
“Given this analysis and the effects we’ve observed so far, liquidations of large amounts of illicitly obtained funds are likely to drive down the price of cryptocurrencies,” it said, hypothesizing that the company had started embezzling funds and funneling money to its operators.
The firm has continued its money laundering. Last month, popular crypto tracking platform Whale Alert spotted a transfer from one of its wallets. The transfer included 26,316,339 EOS tokens, all worth about $67 million at the time.
Three days later, Whale Alert noted that operators tried to move another 789,500 ETH (about $181.5 million). While the transfer got held up by network congestion issues, the operators split the tokens up in 50 different transactions and managed to get it through.
PlusToken’s asset movements have had profound effects on asset prices. Many believe that the Bitcoin crash of March was due to its asset movement effects, although Chainalysis pointed out that the company’s asset movement at the time slowed down. So, it couldn’t have caused the market crash.
Many also feared that the ETH and EOS transfers could lead to a market correction. However, none of those manifested.
These arrests are also not the first to be noted for PlusToken. Last July, law enforcement agents apprehended six Chinese citizens in Vanuatu, a country in the Pacific Islands. PlusToken denied connections with the men, claiming that they were mere customers. However, investigators found proof that they had been company operators.
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