According to Primitive founder, Dovey Wan, the latest Bitcoin sell-off is down to a major Chinese ponzi scheme. Little known outside of China, PlusToken scammed over 200k BTC and 800k ETH, which are now hitting exchanges in batches.
Not Another Bitcoin Ponzi Scam
Started mid-2018, PlusToken was a classic Ponzi scheme offering high-yield investment return. There were four layers of membership structure, offering increasing dividends. By early 2019, it had a claimed 10 million members.
— Dovey Wan ? ? (@DoveyWan) August 14, 2019
The core team were apprehended by police two months ago and will be in jail for decades, according to Wan. However, the reported $3 billion of cryptocurrency they scammed out of members has not been recovered.
Many of the Bitcoin wallet addresses used are believed to be multi-sig, leading to speculation that some key holders remain at large.
The Bitcoin Sell-Off Began In Early July
Security audit firm, Peckshield, has been monitoring money-flow from the PlusToken wallets, and found that since early-july about 1000 BTC has gone into Huobi and Bittrex exchanges. Funds have been moving in small batches of 50-100 bitcoins per batch.
Unconfirmed reports from Chinese traders suggest that someone has also been consistently dumping 100BTC batches onto Binance. This is also believed to be related to PlusToken.
Not News Until Now
One of the big questions around all this is ‘Why are we only hearing about it now?’.
Again, according to Wan, there are three main reasons that exchanges have not paid attention.