In 2019 the world was captivated by news of a Chinese-based crypto Ponzi scheme called PlusToken.
The ringleaders of this scheme defrauded unsuspecting investors out of billions of dollars’ worth of crypto.
The sale of these fraudulently obtained tokens was largely thought to have placed immense pressure on the crypto market, being part of the reason why Ethereum, Bitcoin, and other digital assets all saw capitulatory declines from their mid-2019 highs.
It now appears that another Chinese-based Ponzi scheme also stole a massive amount of crypto from investors in 2018 and 2019.
According to reports, the scheme had more than 715,000 registered users, drawing a total of 46,000 Bitcoin and over 2 million Ethereum.
If history repeats itself and the leaders of this scheme begin offloading their crypto holdings onto the open market, it could place some significant downwards pressure on BTC and many other cryptocurrencies.
WOTOKEN Ponzi Scheme Garners More Than $1 Billion Worth of Crypto from Investors
Following Bitcoin’s sharp rise to highs of $14,000 in 2019, the PlusToken Ponzi scheme began offloading their illicitly obtained crypto on Huobi – placing a massive amount of selling pressure on the market.
It is estimated that the scammers stole a total of 200,000 BTC from investors, which they then proceeded to sell on the open market rather than attempting to use OTC orders.
Dovey Wan – a founding partner at Primitive Crypto – explained in a recent tweet that another Ponzi scheme similar to PlusToken also scammed investors throughout a massive amount of crypto.
According to Wan, the scam was active from July of 2018 to October of 2019.
In total, they stole a total of $1 billion from investors.
“WOW another mega-size crypto Ponzi WOTOKEN just second to PlusToken gets clamped down by Chinese police and by reading the court ruling material here are some eyes whopping data. TLDR: active July 2018 to October 2019, WoToken scammed total over **1 BILLION USD**”
WOW another mega-size crypto Ponzi WOTOKEN just second to PlusToken gets clamped down by Chinese police and by reading the court ruling material here are some eyes whopping data
active July 2018 to October 2019, WoToken scammed total over **1 BILLION USD**
— Dovey 以德服人 Wan (@DoveyWan) May 16, 2020
WOTOKEN’s BTC Holdings Could Place Pressure on the Market
It’s unclear as to whether or not the WOTOKEN ringleaders are currently – or have previously – market sold any of their crypto.
That being said, Wan also notes that they acquired over 46,000 BTC and 2 million ETH.
“Total registered users: 715,249: Total hierarchical levels: 501. Total scammed crypto: 46,000 Bitcoin – 2.039 million ETH – 292,000 Litecoin – 56,000 Bcash – 684,000 EOS. According to the price on the day police involved, total value is more than 7.769 billion yuan ($1B USD).”
If this crypto does find its way onto the open market, it could perpetuate another selloff.
Featured image from Unplash.