PlusToken Wallet and Exchange

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Plus Token Logo, Event Pictures

From the looks of it, this has little to do with the exchange itself; however it’s worth noting that even today little is known about the incident. The main issues were that you had unknown people running the operation and they had no intent on honouring anything.

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

About PlusToken

“US$2.9 billion worth of deposits appear to have been lost when Chinese police broke up an alleged Ponzi scheme involving the purportedly South Korea-based crypto wallet and exchange, PlusToken.” “In late June, PlusToken users began to experience trouble withdrawing custodial crypto assets. On June users found that withdrawals on the PlusToken app were frozen due to alleged “technical difficulties,” but by June 29 the PlusToken app had completely shut down due to alleged “system maintenance.””

"On July 31, Chinese authorities arrested 109 people suspected of involvement in the PlusToken cryptocurrency fraud ring. The South Korean Ponzi scheme was advertised as a high-yield investment for crypto traders, with the company claiming investors would achieve 9% to 18% monthly returns."

"Members were encouraged to bring others into the fold in exchange for a commission, creating a Ponzi scheme of massive proportions. Last year, the operators of PlusToken performed a suspected exit from their scam, in which roughly $3 billion was withdrawn from the accounts of up to four million users who suddenly found themselves unable to access their funds. The Chinese Ministry of Public Security says that they have 27 "major criminal suspects" and a further 82 "key" members of PlusToken in police custody."

"As this case keeps unfolding, the real scope of the financial damage continues to come to light. The original estimate of the amount stolen was $3 billion, but Chinese media outlet Chain News now suggests that $6 billion was stolen from investors."

This exchange or platform is based in South Korea, or the incident targeted people primarily in South Korea.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

The Plustoken project, initiated in 2018 by an individual named Chen Bo, operated as a multi-level-marketing (MLM) crypto scam, promising high returns and attracting millions of participants.

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The project's leaders orchestrated their exit in mid-2019, defrauding investors of substantial amounts.

Key Event Timeline - PlusToken Wallet and Exchange

Date	Event	Description
June 1st, 2019 12:01:23 AM MDT	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
December 2nd, 2020 9:30:29 AM MST	Bitcoin.com Article On Sale	Bitcoin.com reports on a court ruling in China which revealed that the government seized over $4.2 billion worth of cryptocurrency assets from the PlusToken scam, resulting in several masterminds of the scheme being sentenced to prison terms of up to 11 years. While the court ruling announced that the seized proceeds from the PlusToken scam would be forfeited to the national treasury, onchain researchers suspect that a significant portion of the confiscated cryptocurrencies, particularly Bitcoin, may have already been sold. According to reports from OXT Research, the Chinese government, believed to be one of the largest Bitcoin holders at the time, likely sold off a substantial portion of the seized Bitcoin on the open market, with proceeds potentially added to the central treasury. While the exact details of how the Chinese government handled the sale of the seized cryptocurrencies remain unclear, it is suggested that Huobi might have assisted in the process.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

Research from OXT Research indicates that the post-shutdown PlusToken bounty amounted to approximately 200,966 BTC, with a value of $3.8 billion.

The total amount lost has been estimated at $6,000,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

A court ruling in China revealed that the government seized over $4.2 billion worth of cryptocurrency assets from the PlusToken scam, resulting in several masterminds of the scheme being sentenced to prison terms of up to 11 years. The Plustoken project, initiated in 2018 by an individual named Chen Bo, operated as a multi-level-marketing (MLM) crypto scam, promising high returns and attracting millions of participants. However, the project's leaders orchestrated an exit scam in mid-2019, defrauding investors of substantial amounts.

While the court ruling announced that the seized proceeds from the PlusToken scam would be forfeited to the national treasury, onchain researchers suspect that a significant portion of the confiscated cryptocurrencies, particularly Bitcoin, may have already been sold. According to reports, the Chinese government, believed to be one of the largest Bitcoin holders at the time, likely sold off a substantial portion of the seized Bitcoin on the open market, with proceeds potentially added to the central treasury. While the exact details of how the Chinese government handled the sale of the seized cryptocurrencies remain unclear, it is suggested that Chinese exchanges such as Huobi might have assisted in the process.

Total Amount Recovered

It is suggested that a considerable portion of coins involved in the scheme, after being mixed for obfuscation, were sold through cryptocurrency exchanges, primarily Huobi. The selling activities allegedly started in mid-2019 and persisted until the end of the year. Ergo's research findings imply that the majority of the Plustoken-related selling activities may have concluded, with only a fraction of the seized Bitcoin remaining and a significant portion allegedly sent to known digital currency exchange addresses.

There is no indication that any funds were returned to victims of the fraud.

Ongoing Developments

There are speculations about the liquidation of proceeds regarding the involvement of Chaindigg, a company reportedly employed to dispose of the Ponzi's coins, potentially indicating a connection to another similar scheme called Wotoken.

General Prevention Policies

Coming soon.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.