The third largest Ponzi scam in history, Plus Token Wallet, allegedly scammed investors out of $3 billion in cryptocurrency. Over $2.1 billion of this is in Bitcoin. As the perpetrators make their exit these coins could flood the market and tank prices.
Background on Plus Token
Plus Token Wallet was a mobile application promoted across China, South Korea, and Southeast Asia that promised outlandish 6 to 18 percent monthly returns. These returns, the project claims, were made via cryptocurrency arbitrage, trading, and mining—similar to claims made by coins like BitConnect. People were encouraged to recruit people under them in a multi-level marketing (MLM) structure employed by businesses such as Amway, Avon, and Mary Kay.
The main difference with Amway, however, is that Plus Token didn’t really sell products or services. Their revenues were made exclusively from the $500 minimum investment from participating in the app and additional ‘investments’ made in Bitcoin, Ethereum, EOS, and other coins exchanged for supposedly interest-generating PlusTokens. More precisely, the app made money by paying old investors with money from new investors—the hallmark of a Ponzi.
Found in a food court in Kuching, Malaysia
By structuring the project as a MLM the scam was able to grow rapidly through Asia, reportedly taking in $3 billion.
The big bust
Beginning in June, Plus Token affiliates began to experience withdrawal delays. Soon, withdrawals stopped altogether. Chen Jingbo, the most public of the Plus Token leadership, wrote the following message on July 1 on Facebook:
“Plustoken is affected by hacker attack. In order to ensure the safety of users’ assets, we will upgrade and protect the overall system, and suspend the coin charging business until July 5th.