You may not know it, but over the past year, the largest crypto scam set up operations, stole billions worth of cryptocurrencies, and then exited the space.
The scam is PlusToken, which billed itself as a wallet that offered its users high return yields for depositing Bitcoin, Ethereum, and other digital assets into their system. Of course, it actually wasn’t a bonafide wallet, it was a pyramid scheme reminiscent of BitConnect.
With this scam taking place on such a large scale, many are still left picking up the pieces. Elementus, a blockchain analytics firm, recently released one of the first research reports on PlusToken’s dealings, unveiling crazy facts about the little-known yet devastating scheme.
10% of Ethereum Supply Was Scammed
Last week, Dovey Wan, a founding partner at crypto fund Primitive Ventures, shocked the Western cryptocurrency community. In a series of impassioned tweetstorms, the Chinese venture capitalist unveiled PlusToken’s dealings, making mentions of the project’s founders, rationale, and booty.
She wrote that per her analysis of the PlusToken-related addresses that are available online, the scam stole some 200,000 Bitcoin, 800,000 Ethereum, and a mass of other cryptocurrencies — all amounting to a fiat sum of over $3 billion.
While this is crazy in and of itself, Elementus’s recent report claims that the scam went even deeper than that.
In a Friday blog post, the analytics firm revealed that they estimate that the PlusToken scheme managed to absorb 10 million ETH — yes, million — over the course of the scam from some 800,000 unfortunate participants.
As of the time of their report’s publishing, 820,000 ETH can be identified and found on-chain. The remainder, around nine million ETH, are scattered across thousands of addresses. It is important to note that Elementus was unable to determine the status of the funds:
“It is unclear how many of these large transfers represent the winnings of users at the top of the pyramid, or PlusToken insiders disguising an exit scam as a complex withdrawal trend.”
But, they did point out that a near-majority of the Ethereum payouts “were moved into exchanges”, implying that ringleaders or participants of the pyramid were constantly cashing out of this scheme.
With this in mind, it is likely that PlusToken’s web goes deeper than many currently believe.
How Did PlusToken Get Away With It?
All this begs the question — how exactly did PlusToken manage to run a scam worth billions for so long without international authorities and Western media catching up?
Michael “BoxMining” Gu, a Hong Kong-based prominent industry content creator and personality, recently broke down the scam, revealing information about the project that much of the English internet didn’t know before.
In the below video, he explained how PlusToken managed to rile up an audience of over 800,000. Gu claimed that they focused on small groups, getting a hundred or two hundred individuals into group chats on a platform like WeChat or Line.
Then, ringleaders would teach those in the group how to purchase Bitcoin and other cryptocurrencies and use the PlusToken application. Any person who was overtly skeptical of the platform was banned, hence why word of the scam likely hasn’t spread until now.
This method was then replicated through affiliates to grow PlusToken’s network.
It recently fell apart when deposits slowed down from the “wallet”, eventually stopping altogether. This triggered the public to start a manhunt, which ended when six primary ringleaders were caught in Vanuatu. There purportedly remain some PlusToken executives on the run, who individuals like Dovey Wan continue to try and launder the funds.
Boxmining divulged one interesting tidbit in the video: there remain some PlusToken victims that still believe that the project will come back, but there is a message embedded in one of the PlusToken-related addresses that reads: “sorry, we have run.”