PlusToken: An Obscure Scam and a Dangerous Bitcoin (BTC) Whale

PlusToken, a scam that spread to China and Korea in the past months, accrued vast Bitcoin (BTC) reserves, currently liquidating them in daily tranches.

PlusToken is a crypto earning scheme that targeted Korean buyers, but also affected the Chinese market. Recent research revealed that PlusToken, working outside the scope of the widely used crypto social media, managed to raise billions. PlusToken turned out to be the biggest scam for the second quarter of 2019, triggering police action in China.

But the fallout of PlusToken has not ended with arrests and an investigation. The scheme, offering outlandish earnings, managed to load up its wallets with a vast Bitcoin (BTC) wealth.

Dovey Wan, co-founder of Primitive Crypto and one of the more influential Twitter accounts, brought the PlusToken story to the attention of a wider audience. The case of PlusToken went largely unnoticed, due to the inherent divide between Western crypto-enthusiasts and the vast Chinese market. Language barriers and the usage of different social networks helped PlusToken go unnoticed and pray on Asian investors.

Wan calls for essentially censoring some of the BTC raised by PlusToken. She presented a list of wallets holding significant funds, with analysis showing the funds tricked into Binance and Huobi for liquidation. A handful of BTC addresses were presented, real “whale” wallets with tens of thousands of BTC:

In general, exchanges have cooperated in the past to blacklist wallets and addresses, which are known to be related to hacks or scams. So far, no reaction has come from exchanges, and the PlusToken founders may keep liquidating the coins.

Wan warned that the actions of the scammers could end up depressing BTC prices in a prolonged series of sales. Selling larger tranches is also possible, to further depreciate BTC. Thus, Wan demonstrated that a single scam could have wider repercussions within the crypto ecosystem.

BTC continues to suffer from its reputation as a coin for illegal actions. The presence of tainted addresses and coins has increased demand for “virgin BTC”, or newly mined coins without a transaction history. At the same time, blacklisting addresses is, in essence, a form of censorship over the Bitcoin network.

Reading now