A recent revelation by a crypto researcher has sent shockwaves through the cryptocurrency market, as it was reported that the Chinese government has transferred 15,700 ETH associated with the infamous PlusToken Ponzi scheme from its wallets. Of this amount, approximately 7,000 ETH—valued at around $16 million—was moved to wallets linked to major cryptocurrency exchanges, leading to fears of imminent liquidations.
PlusToken was an investment platform that operated under the guise of a legitimate cryptocurrency venture, led by ringleader Chen Bo. It attracted millions of investors by promising high returns based on referral incentives. The scheme ultimately collapsed in mid-2019, resulting in the loss of an estimated $4 billion in investor funds. In December 2020, Chinese courts sentenced several key figures behind PlusToken to eleven years in prison for their roles in the fraud.
The Chinese government confiscated a significant amount of crypto assets related to PlusToken, including Bitcoin, Ethereum, Dogecoin, and XRP, in a crackdown on the operation. This haul was later handed over to Beijing Zhifan Technology Co. for conversion to fiat, with proceeds designated for restitution to affected investors.
The researcher flagged that Chinese whale wallets had become active for the first time since 2021, with transactions totaling 15,700 ETH occurring in just 24 hours. The movement of 7,000 ETH to exchanges such as Binance, Bitget, and OKX has raised suspicions of a potential sell-off. Following the news, the cryptocurrency market showed signs of a slowdown, with Bitcoin dropping from $62,000 to $60,000 and Ethereum falling 3.2%, trading at $2,393 at the time of publication.
At the peak of PlusToken’s operation, the scheme received over 10,000 BTC, valued at more than $80 million. Although much of this Bitcoin was liquidated between August 2019 and March 2020, the ETH associated with PlusToken had remained untouched in secured wallets until now. This recent activity has raised concerns that the liquidation of ETH could exert significant selling pressure on the market, potentially mirroring the impact of past actions.
The researcher highlighted that one-third of the 840,000 ETH was moved to a lesser-known exchange, Bidesk, which may be indicative of an impending sale. The remaining ETH assets were confined in mixing addresses until they were reconsolidated into 294 addresses, which collectively hold 542,000 ETH worth approximately $1.3 billion.
According to data from Bitcoin Treasuries, China is currently holding around 190,000 Bitcoin, making it the second-largest government holder of Bitcoin, trailing only behind the United States, which holds 203,239 Bitcoins. The United Kingdom ranks third, with a supply of 61,000 Bitcoins.
The recent transfer of ETH linked to the PlusToken Ponzi scheme by the Chinese government has raised alarms in the crypto community, with potential implications for market stability and investor confidence. As the situation develops, market participants will be closely monitoring these transactions and the broader impact on cryptocurrency prices. The unfolding narrative underscores the importance of regulatory actions in the evolving landscape of digital assets.
October 2024, Cryptoniteuae