WOTOKEN

DESCRIPTION OF EVENTS

"WOTOKEN functioned from July 2018 to October 2019." "715,249 people registered on its platform. WOTOKEN absorbed from them 46,000 bitcoins, over 2 million ethers, 292,000 litecoins, 56,000 BCH, 684,000 EOS, and large quantities of several other less known digital assets." "[M]arketing messages claimed that [the wallet] worked as a smart online wallet for cryptocurrencies that generated automatic profits for users without their involvement." "It worked as a classic MLM project, but it had a suspiciously high number of total hierarchical levels – 501"

"27 members were reportedly masterminds within Plustoken’s empire, which was extremely popular in China and South Korea." "According to local reports, the trial began on May 14th in the People’s Court of Binhai Country, Yancheng City, against six defendants allegedly operating the WOTOKEN project. More specifically, the court blamed that they organized and managed multi-level marketing (MLM) activities, covered up false stories, provided misleading information, and concealed income, and even crimes." "While the prosecution had requested all of them to pay an undisclosed fine for their actions, the jail time may vary from six months to eleven years, the report outlined."

"On May 14, 2020, the trail against six core operators responsible for organizing and leading multi-level marketing (MLM) activities for Wotoken began in the People's Court of Binhai County, Yancheng City. According to the public hearing, this Ponzi scheme was active from July 2018 to October 2019 and had 715,249 registered users. In its little over a year of operation, the scheme netted the Wotoken fraudsters more than 7.7 billion yuan (roughly US$1.09 billion) worth of crypto."

The website was extremely simple and promised a "New Safe Platform". Users were instructed to "Download WO TOKEN DAPP, Create an account by phone number or email." There was an Android and iPhone version of the wallet. "WO TOKEN wallet can add mainstream digital asset like BTC ETH LTC ETC. Platform coin 'WOR' can exchange others." The only mention of profit was a "financial management tool" refered to as "Apollo Plan" - which did not include any specific expected returns on the website. Trust was built based on logos of numerous credible organizations such as BTC.com, Forbes, CCN, and Ethereum.org. Videos promoting the wallet on Facebook informed users that they remained in control of their private keys (which was false), while simultaneously describing "risk-free arbitrage trades" made by the Apollo AI Trading Bot making 0.21% - 0.61% per day, which would double if the user shared the wallet with a few friends. Other posts simply had people showing off modest gains after short periods of time. In reality, it appears the scheme was actually using the deposits of new participants to pay the interest for existing participants, and withdrawals continued until April 4th, when users were "temporarily unable to access" withdrawals due to "block synchronization", and "system upgrade and maintenance for 24H" on April 5th. By September, the website hosting had expired. Easy registration for all cryptocurrency trading businesses can give consumers an easy way to check the legitimacy and backing level of any operation.

News Release | BCSC (Oct 2)
“wotoken”特大传销案盐城开庭审理，涉及71万人77亿余元 (May 15)
WoToken Alliance - Learn how to make passive income with crypto using this Dapp (May 15)
WoToken (May 15)
WoToken Review: WOR token Appollo bot Ponzi scheme (May 15)
@DoveyWan - Twitter (May 16)
PlusToken Scammer Implicated in China’s Second Ten-Figure Crypto Ponzi (May 16)
DeFi is still growing - which projects are they running? | Tokeneo (May 17)
New Ponzi from Plustoken Scams: WOTOKEN Stole $ 1 Billion Bitcoin, Ethereum and Litecoin! - Somag News (May 17)
The New PlusToken: Chinese Scam WOTOKEN Stole Over $1 Billion Worth of Bitcoin And Other Cryptocurrencies (Jun 24)
6 Members of the Multi-Billion Dollar Plustoken Scam Charged With Fraud in China | Bitcoin News (Sep 9)
CipherTrace Cryptocurrency Crime and Anti-Money Laundering Report 2020 (Jun 20)

More case studies

MakerDao Auction
Lack of Validation

PayFair P2P
Exchange Hacked