Chinese police seize crypto worth US$4.2 billion from PlusToken scheme

The Chinese law enforcement has seized a huge amount of crypto assets after its crackdown on the infamous PlusToken Ponzi scheme. In the court ruling of Jiangsu Yancheng Intermediate People’s Court on November 19, the crypto assets confiscated by the police are worth more than US$4.2 billion.

As per the court ruling, the breakdown of all digital assets seized by the authorities lists:

• 194,775 Bitcoin (BTC)
• 833,083 Ethereum (ETH)
• 487 million Ripple (XRP)
• 79,581 Bitcoin Cash (BCH)
• 1.4 million Litecoin (LTC)
• 27.6 million EOSIO (EOS)
• 74,167 Dash (DASH)
• 6 billion Dogecoin (DOGE)
• 213,724 Tether (USDT).

‘The seized digital currencies will be processed pursuant to laws and the proceeds and gains will be forfeited to the national treasury’, the court ruling explained.

Be that as it may, it is still not clear how China will dispose of the crypto assets. If they were sold en masse for fiat money, it could affect the prices of the crypto coins in the confiscated pool. Previous sell-offs of ill-gotten assets have been linked to sudden drops in the price of BTC. This is because of the abrupt spike of supply in the market.

Reportedly, the notable amount of BTC confiscated by the police is nearly 1% of the entire Bitcoin supply currently circulating in the market. At the time of the court ruling, it is worth over US$3 billion since it is the world’s largest crypto by market cap.

On the other hand, the total volume of seized USDT has a current value of US$213,952.0435. Tether is the largest stablecoin in the market today. The massive bulk of digital assets was taken from around 7 scam operators in the pyramid scheme.

It is said that the PlusToken Ponzi scam will have taken even more than this sum from victims. All of the 27 alleged masterminds of the scheme were arrested on July 30, 2020. Along with them, 82 core members were also taken into custody.

This arrest marked the first time the Chinese law has cracked down on a major international Ponzi scheme that used Bitcoin as an exchange method.

It was in 2019 when the police started their investigation, arresting 6 people said to be connected to the scheme. The suspects were extradited to China from Vanuatu where PlusToken was rumoured to have operations.

The Ponzi scheme was alleged to have grown to more than 3,000 layers from April 6, 2018 and June 27, 2019. Over this period, it has ripped off over 2.6 million people with the use of crypto (most notably Bitcoin) as a funding channel.

Since then, the total volume of crypto assets fleeced from its members is roughly worth a whopping ¥50 billion or US$7.6 billion. It is reported that the fraudsters spent the fund on luxury cars, two dozens of real estate properties in China, as well as insurance policies in Hong Kong.

So far, a total of 15 people were convicted. They were sentenced between 2 to 11 years in prison with fines ranging between US$100,000 to US$1 million.

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