What is Plus Token
“Plus Token” was a cryptocurrency Ponzi scheme disguised as a high-yield investment program. Platform administrators closed down the operation in June of 2019. Fraudsters abandoned the scheme by withdrawing over $3 Billion dollars in Cryptocurrencies (Bitcoin, Ethereum and EOS) and leaving the message “sorry we have run“. This has led to an international man-hunt for the platform administrators and creators of Plus Token. Plus token has been blamed for causing Bitcoin prices to fall in 2019 as stolen funds were sold via Bitcoin OTCs.
PlusToken had a major following in Korea and China – especially among investors not familiar with cryptocurrencies. Plus token was a High Yield investment program which offered massive rewards on “investment” to unsuspecting victims in China and Korea. The scheme offered 9% to 18% monthly returns on investment – with larger investments getting more rewards. This type of is similar to other High Yield investment programs like “Bitconnect” which collapsed in January of 2018.
How did the Plus Token Ponzi Scheme Work?
Plus Token is a classic ponzi scheme it lures unsuspecting victims to invest with promises of high returns and low investments. Plus Token maintained an illusion of a sustainable business by pretending the funds are used to develop cryptocurrency related products such as the Plus Token Wallet and Exchange. However, returns are generated by dividing more recent investments to pay off older members. The illusion of a sustainable business is what classifies this as a Ponzi Scheme, as victims actually believe that are investing in a business that generates high returns.
Plus Token also had a strong referral element, which gave huge bonuses to any member who referred friends and family into the scheme. Investors were divided into 4 “tiers”, according to how much they invested and how many other referrals they can make. This meant the more a member referred, the exponentially higher the return. Members started to refer their friends and family to invest of large sums of cryptocurrencies including Bitcoin, Ethereum, EOS and Litecoin.
How did it become so popular?
Plus Token relied heavily in conferences and meetups to promote the token. The following video is taken at a Plus token gathering.
Payments stopped 30th of June 2019
Early signs of trouble in started surfacing in June of 2019 as users started reporting delays in fund withdraws. Some took to complain on Chinese social media site “Weibo” citing that they were unable to receive funds despite writing for 35 hours after submitting withdraw requests (Source Blocktempo).
Initially Plus token blamed on “higher miner fees” for the withdraw delays. They claimed the sent transactions with 1 sat /byte, leading to long delays on the Bitcoin Blockchain. Plus token supporters avidly as their followers to “believe” in the system and disregard the “false information”.
Scammers: “Sorry We have run”
As funds began moving, one of the transactions carried the note “Sorry, we have run” as a comment to the transaction. This really needs no explanation – organisers of the scam have initiated their exit strategy and fled the country.
Arrests and extradition back to China
Law enforcement were able to arrest 6 of the suspects involved with PLUS token in Vanatu on the 29th of June 2019. They were detained and extradited back to China to face trial. Seems like they didn’t do enough research when fleeing the country.
Tip of the Iceberg
PlusToken can be seen as the tip of the Iceberg as there are many other very similar crypto ponzi schemes and scams. These include Cloud Token, S Block and other cloud “mining” tokens. At the end of the day, tokens that ‘guarentees’ high returns without a clear and audit-able business plan should generate red flags.
Laundering stolen funds into exchanges
Luckily research is being down to track wallets known to be associated with Plus Token (8btc.com, @doveywan, @PeckShield). Work done by @PeckShield has shown funds moving from large wallets (~5000+ Bitcoin) to smaller wallets, and eventually into cryptocurrency exchanges. Due to the large sums of cryptocurrencies moved and actively being sold off – Plus Token played a role in dropping the price of Bitcoin.
Known amounts Scammed – List sum of BTC from identified and tracked addresses. Reports have been circulating that up to ~1% of the entire Bitcoin supply is involved in the scam. Currently more wallets are being added to this list.
- 70000 BTC ($700,840,000 USD)
- 789511 ETH ($142,111,980 USD)
- 26299109 EOS ($92,046,881 USD)
Known Bitcoin Wallet addresses (Source 1):
- 1MFgcyJ7ZNSknbTBRaih6zWDE6V1A64tRY (1865 BTC)
- 3ETAVt2scYBFkBFksuNDk1i5tDLQ2c4zWR (4922 BTC)
- 3EYsru4LUcN258sENYPu5Py3S5WnqxEcnE (3657 BTC)
- 3HKs1g7u5a1uU4pC5HaNooYMbL1Lao4mv4 (3928 BTC)
- 3ESakThMrdVVrbhhcpf9spicyjCg1Uk8Jm (3289 BTC)
- 33LNws16Wfs12usWBNfa1MSX3YKY6Hdayf (3270 BTC)
- 3HwY536CxznDxMjiRCFkpx5ykwJbJMZY4w (1725 BTC)
- 35bCzX3RQEWdquqCPQkmdJdu2K4ut1roUZ (3676.86 BTC)
- 31owhyALzzPEqUFwRbU5yQR4wNhYEjCiE5 (749.66 BTC)
- 3PBN3MCpDcZKr7WdyY1ULq1NeGwLNjpkj7 (12000 BTC)
- 14bwh6gmvol5ntwbvxqjkjdtzv4y5ebtvm (95228 BTC)
- 33FKcwFhFBKWHh46Ksmxs3QBu8HV7h8QdF (37922 BTC)
Known EOS Addresses of Plus Token
Known Ethereum Addresses of Plus Token
Plus Token Sell-offs Responsible for Bitcoin Price Drop?
Since as early as August 2019, Chinese cryptocurrency trading groups have already been circulating that due to the sheer amount involved, the scammers trying to dispose of the ill-gotten Bitcoin are pushing prices downward. And this price dump halted on 15th August 2019, coincidentally when Binance was suspended for trading because of system upgrade.
In late November 2019, this issue was again brought to the forefront when Twitter user Ergo reported having traced 187,000 BTC of the approximately 200,000 BTC attributed to PlusToken’s investors. As to these funds, Ergo found they were “shuffled” (albeit badly, if at all) and gradually sent to various cryptocurrency exchanges and OTC brokers, primarily Huobi, for sale on the market.
Ergo predicts that if all the “mixed” funds were sold from August to November 2019, it would average out to be around 1,300 BTC sold per day. This could lead people to think it would have an effect on Bitcoin prices, which has fallen from USD $9,981.41 on 1st August 2019 to USD $7,182.89 on 4th December 2019.
Based on Ergo’s estimates of the amounts sold daily, the sell-off of the remaining 58,000 BTC or so Plus Token funds would continue for another 1.5 to 2 months.
In an apparent pattern, PlusToken scammers move their funds when BTC prices experience volatility. Such was the case on 11th February 2020, when Bitcoin trading at around USD $9,800, almost 12,000 BTC (worth around USD $118 million) from one of the addresses associated with the Plus Token funds were moved and split amongst various other wallets.
On 7th March 2020, Bitcoin was again trading at over USD $9,000. Again, Plus Token funds were being funneled through mixing services. This time, Twitter user ErgoBTC noticed that a total of 13,000 BTC (worth around USD $210 million) was involved. Analysts such as Kevin Svenson believe the scammers were “slamming the market with sell orders” every time Bitcoin prices went up so as to unload the funds.
Plus Token Sources and References
Chinese Sources and News Coverage
Special thanks to Matthew Graham for providing the videos and research!
https://3kemao.com/archives/124864?from=singlemessage&isappinstalled=0 https://www.ccvalue.cn/article/3952.html?from=singlemessage https://mp.weixin.qq.com/s/EJLo-Rjjzz283FOCbzuLuA https://mp.weixin.qq.com/s/HQxl5gKd0105tUIsQ0TQPg https://mp.weixin.qq.com/s/rPtQAo0sf4P_LDM-8K0Z1g
Crypto Wallet Addresses
Chainnode Research: https://www.8btc.com/article/440193
Plus Token Wallet Addresses: http://gscaijing.com/archives/21291
Arrests / Man-hunt
Plus Token sell-offs and Bitcoin price correlation?
Findings from Twitter user Ergo: https://twitter.com/ErgoBTC/status/1197496064854634496?s=20
Updated on 4th December 2019 to include new section- Plus Token Sell-offs Responsible for Bitcoin Price Drop?
Updated on 18th December 2019 to correct spelling mistakes and more details of how the Ponzi Scheme operated
Updated on 9th March 2020 on the latest Plus Token moves in 2020.