Ponzi Scheme Effecting Crypto Exchanges
Recently, the increasing pressures of the cryptocurrency market have triggered a significant set of hurdles that now need to be overcome. The latest concern facing the market is a Ponzi Scheme originating from China called “Plus Token”. This concern was first mentioned by Dovey Wan, the Founder & Partner of Primitive Ventures. He noted to the press on August 14th that Binance, Bitrex and Huobi have been affected by this scheme.
Plus Token became operational in May 2018, with insurances of monthly interest of 6% to 18% on cryptocurrencies deposited. Just like a typical Ponzi scheme in the crypto space, Plus Token maintained a four-tier membership. According to Wan, the project earned revenues from ten million investors and was able to garnish $3 Billion in funds.
Ponzi Scheme Still at Large
Chinese Authorities have arrested the criminals connected to the Plus Token Ponzi Scheme. However, the wallet addresses relating to the scheme haven’t been confiscated by police due to the P2SH Design. However, to combat the effects of this scheme, Dovey Wan released the addresses of these wallets. He also released evidence relating to the scheme accessing digital asset exchanges. His tweets have gone viral since, with a large portion of the crypto community now aware of the scheme. The information that Dovey Wan released was collected from Peckshield, a security audit firm operating in the European Union.
Wan also indicated that the remaining criminals at large have been transferring funds in batches of 50 to 100 BTC, allowing them to avoid attention from the authorities. Primitive Ventures, the company owned by Wan, has requested that Chainalysis&Peckshield monitor the addresses relating to the Ponzi Scheme. Unfortunately, this isn’t the first time that a cryptocurrency-related Ponzi scheme was able to ascertain billions in funds. Another infamous scheme was OneCoin, where investors worldwide had $4 Billion in funds stolen. Even with the increased efforts of financial authorities worldwide, these schemes are still prevalent and show no signs of decreasing.