- Researcher Chainalsysis found that the biggest Ponzi scheme behind the 50% drop in BTC price
- PlusToken has cashed out at least $185,000,000 worth of stolen token via Huobi
Bitcoin is currently stuck at just above $7,000 and hasn’t dropped below this level for the past two weeks. But now might be the time to be cautious because PlusToken scammers might be back in the market, the New York-based firm Chainlysiss said Monday in the wake of a five-month investigation.
Researcher Chainalysis released a new report stating the world’s largest cryptocurrency likely to remain under pressure as perpetrators of the estimated over $2 billion PlusToken scandal readies to dump coins to cash out.
Chainalysis tracked a total of 180,000 BTC, 6,400,000 ETH, 111,000 USDT, and 53 OMG that were sent from scam victims to PlusToken wallets, this made it the largest Ponzi scheme ever at $2 billion — while Chinese media reported the scam to be of $3 billion.
Chinese Ponzi Scheme PlusToken Behind BTC’s 50% Drop
The scammers have already cashed out at least $185,000,000 worth of stolen token via Bitcoin OTC brokers, Huobi.
The firm found that PlusToken wallets sent a steady flow of BTC starting in mid-April that spiked in late June just before the perpetrators' arrests. In August, a few spikes were then seen again only to start high and remain high throughout September and then a few more spikes in October.
The report found, “spikes in on-chain flow to OTC brokers correlate with drops in Bitcoin’s price.”
Bitcoin tumbled about 50% from its 2019 peak in late June coinciding with Chinese authorities arresting multiple suspects in the pyramid scheme that promised returns as high as 600%.
Chainalsysis tracked roughly 45,000 BTC and 800,000 ETH that scammers transferred to their own addresses. For now, at least 10,000 of 800,000 ETH has been cashed out.
25,000 BTC has been cashed out while 20,000 BTC has been spread out across more than 8,700 addresses — these have been transferred more than 24,000 times using 71,000 different addresses.
This means, nearly $150,000,000 USD worth of Bitcoin is yet to be cashed out that the firm expects to “drive down” the price of cryptocurrencies.
“That’s certainly something to consider when you are thinking about where the price is going, at least in the short term,” Kim Grauer, senior economist at Chainalysis also told Bloomberg. “It could be, according to our research, continued downward pressure.”