January 20, 2021

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Crypto scam: China seizes $4.2 billion worth of crypto

2 min read

  • China authorities says they have seized over $4 billion worth of crypto assets from a crypto scam
  • Crypto analysts questions how the authorities have been handling the seized crypto asset 

In what could rank as one of the biggest scams perpetrated in the crypto industry, reports have emerged that the Chinese authorities have seized Bitcoin and other crypto assets worth almost $4.2 billion.

According to available information, the crypto scam happened on PlusToken. 

PlusToken is alleged to be a Ponzi scheme that promises a high profit margin for investors. The scam told investors that they would be able to make their gains through the profits made by the exchange and they would also have an opportunity to earn via the mining of the token.

Not only that, the firm also informed their investors to refer more investors to them as it is an opportunity for them to earn more too.

PlusToken started in South Korea in 2018. Over the years, the firm has been able to draw in millions of unique users. 

CipherTrace in a report said that investors had lost over $2 billion after PlusToken’s app and exchange went offline suddenly in 2019.

New reports have now emerged that the Chinese authorities have been able to seize a large volume of Bitcoin and other altcoins like Bitcoin Cash, Ethereum, LiteCoin, Ripples, DogeCoin and others from the crypto scammers.

Analysts reacts to the crypto scam 

A cryptocurrency influencer, Light Crypto, was of the opinion that the Chinese authorities might have sold the crypto assets seized from the crypto scam last year.

According to him, the authorities were already dumping the coin into Huobi as of 2019.  He alleged that the coins were being moved in batches from their PlusToken addresses.

Alon Gal of cybercrime intelligence firm Hudson Rock noted that the crypto assets the authorities seized had not moved in weeks. 

He added that the seized crypto assets had not moved for more than the last 100 days. He questions why the authorities had not moved the funds then proceeded to ask if the Chinese authorities could be lying about the seized crypto assets.

Chinese authorities on their own part have said that the seized crypto assets are always handled according to their local laws.

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