A new PlusToken report shows that KYC does not solve scams
2 min read
A new report on the Ponzi PlusToken scheme shows that regulated exchanges are used to sell coins, despite stringent KYC (Know Your Customer) rules. Investigative OXT Research has released an in-depth analysis of the PlusToken scam.
What the report contains
The report said that PlusToken funds had been transferred to mixers from unchanged allocations and locations. After the blender, the funds were consolidated and finally distributed. The report from OXT Research stated:
“Approximately 80% of coins entering mixing have been distributed while up to 33,872 BTC remain in the mixer and 3,853 BTC are in the distribution process, resulting in a total of 37,725 BTC that have entered mixing, but not yet been distributed.”
Around $1.3 billion worth has been sold off in the past seven months with the report noting that distribution increases into market strength and “pauses” with market weakness. OXT found that nearly 70% of the total hoard has been distributed to date meaning that “most of PlusToken’s market effects have largely passed.”
A large amount of coins ended up on OKEx. “OKEx is a newly labeled and significant coin destination having received nearly 50% of February distributions,” the report stated, adding that Huobi also remains one of the most significant coin destinations.
ErgoBTC, an analyst closely following developments, pointed to an important aspect of the report — the usage of regulated exchanges for offloading BTC profits, as opposed to over-the-counter (OTC) selling. ErgoBTC tweeted:
The two most important takeaways from this report extend beyond market impacts and have much boarder impacts for Bitcoin.
— Ergo ∴TxIDs Or It Didn't Happen∴ (@ErgoBTC) March 11, 2020
It's time to question your data sources…https://t.co/3oJHcwe5cb
ErgoBTC noted that roughly 13,000 Bitcoin were transferred to a coin mixer, according to a March 6 tweet.
~13k in new PlusToken mixer deposits in last 24 hrs.
— Ergo ∴TxIDs Or It Didn't Happen∴ (@ErgoBTC) March 6, 2020
Almost all previous mixer deposit change has entered mixing, confirming my theory.
Distributions still on/off. Much slower than September and November.
New report and full sit rep imminent. pic.twitter.com/vwrBuVk272
Less than 24 hours later, Bitcoin’s price fell from $9,200 down to $8,850. Bitcoin’s price continued further descent, down to a press time price of $7,930.
Summary
For many months crypto markets have experienced the effects of the unravelling of one of the largest alleged scams in the industry’s history. The operation reportedly began in 2018, ammassing 10 million participants by 2019.
