Almost MMM: the end of the PlusToken crypto pyramid and its impact on the market

the end of the PlusToken crypto pyramid and its impact on the market


Natalia Solovieva | 12/19/2020

Almost MMM: the end of the PlusToken crypto pyramid and its impact on the market

According to the research analytical agency The Block Crypto, the currency seized by the PRC police from the illegal PlusToken crypto pyramid will be sold on the free market, and all profits from
sales will go to the country’s budget. Analysts are inclined to believe that a one-time sale of such a large volume of crypto coins, which has not yet been seen on the market, can have an unpredictable
influence on it, but most likely will not lead to a collapse.

The PlusToken multicurrency crypto project was launched in the spring of 2018 and aggressively promoted in the markets of countries such as China, Japan, South Korea, Myanmar, Vietnam, Germany, the United Kingdom and Russia.
advertising the defunct crypto arbitrage trading platform. Users were attracted by the incredibly high return on investment of cryptocurrency assets – from 6% to 19% per month, by a promise
attractive daily payments, as well as the ability to store almost all of the world’s leading cryptocurrencies in the wallet – Bitcoin, Bitcoin Cash, Ethereum XRP, EOSIO, Litecoin, Doge and Dash. For,
in order to take part in the project, it was necessary to deposit a cryptocurrency wallet in an amount equivalent to $ 500 or more.

The project worked for a little less than a year. PlusToken was charged with fraud in March 2019 – signs of a pyramid investment fraudulent scheme (Ponzi) were found in its operation.
promising investors maximum profitability with virtually no risk. The PRC police conducted searches at PlusToken’s offices in Hunan province, and the head
PlusToken’s Chinese subsidiary, Chen Bo and five other Chinese citizens associated with the project fled and were put on a wanted list by the authorities.

It was possible to track the funds of the defrauded depositors thanks to a cryptocurrency transaction analysis service developed in St. Petersburg.

According to the Jiangsu Yancheng Intermediate People’s Court (PRC), from April 6, 2018 to June 27, 2019, the pyramid scheme attracted more than 2.6 million users. For this
During the period, the scheme “absorbed” more than 314 thousand BTC, 117 450 BCH, 96 thousand DASH, 11 billion DOGE, 1.84 million LTC, 9 million ETH, 51 million EOS and 928 million XRP.

According to the most rough estimates, the value of these crypto assets was about 14.8 billion yuan, or $ 2.2 billion at the exchange rate for the specified period, or over $ 11 billion at the exchange rate at the end of November 2020.
year (at the date of the trial).

In July, Chinese authorities arrested 27 key and 82 minor suspects in the creation of the crypto pyramid. To date, 15 people have been convicted in the PlusToken case. The court sentenced them to prison
imprisonment for terms from two to 11 years and fines from $ 100 thousand to $ 1 million.

According to the judicial investigation, one of the inmates successfully laundered cryptocurrencies worth more than 145 million yuan ($ 22 million). Of this amount, the police have identified traces of about $ 19 million – convicts and their families
spent them on luxury cars, about 20 real estate in China, and insurance policies in Hong Kong.

The PRC government managed to seize cryptocurrencies from the convicts for a total amount equivalent to $ 4.2 billion. For the first time, the court described in detail the size and value of all cryptocurrencies seized from the organizers
financial pyramid – almost 200 thousand BTC, over 800 thousand ETH, 1.4 million LTC, 27.6 million EOS, more than 74 thousand DASH, 487 million XRP, 6 billion DOGE, 79 thousand BCH and 213 thousand USDT …

As the court ruled, the seized digital currencies will be processed in accordance with the laws, and the proceeds and proceeds will be confiscated to the national treasury of the Celestial Empire.

According to experts, the effect of selling such a large amount of cryptocurrencies can be unpredictable. But, most likely, you shouldn’t expect any major changes.

For example, Maria Stankevich, the director of development of the EXMO exchange, described the situation as extraordinary in an interview with the media. A one-time sale of cryptoassets for the indicated amounts can provoke
market decline. But, most likely, the expert believes, the sale will be carried out on the OTC market, so there will be no serious effect. In addition, the crypto community can easily track all
transactions on the blockchain and quickly learn about the sale of assets.

However, according to Maria Agranovskaya, a teacher at the Moscow Digital School, the consequences of the sale of assets of this size and even news about this can lead to a market collapse.

However, according to the co-founder of the STASIS digital currency platform Grigory Klumov, the PRC authorities are unlikely to put up such a significant amount of cryptocurrency confiscated for sale. Since bitcoin is already in
may become an essential part of the financial system in the foreseeable future, the Chinese government will probably decide to keep the assets received.


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