Seized Ethereum from PlusToken Scheme Moves Towards Exchanges

TLDR

Up to $1.3 billion in Ethereum from PlusToken Ponzi scheme may soon be sold
7,000 ETH ($17.2 million) has already been sent to exchanges
PlusToken operated in China from 2018-2019, attracting 2.6 million participants
Chinese authorities seized various cryptocurrencies, including 1% of Bitcoin’s total supply
Potential sale could increase selling pressure on Ethereum

A significant amount of Ethereum, valued at up to $1.3 billion, seized from the infamous PlusToken Ponzi scheme is reportedly on the verge of being sold on cryptocurrency exchanges.

This development has caught the attention of market analysts and investors, as it could potentially impact Ethereum’s price and overall market dynamics.

PlusToken, a fraudulent investment scheme that operated in China between 2018 and 2019, attracted approximately 2.6 million participants before authorities shut it down.

During the crackdown, law enforcement agencies seized substantial amounts of various cryptocurrencies, including Ethereum, Bitcoin, and others.

According to recent on-chain data analysis by OXT Research, some of these funds have already begun moving.

Pseudonymous analyst Free Samourai reported that about 7,000 ETH, worth around $17.2 million, has been transferred to cryptocurrency exchanges such as BitGet, Binance, and OKX. This movement suggests an intention to start selling the remaining tokens.

In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.

Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L

— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024

The total amount of Ethereum seized from PlusToken and potentially available for sale is estimated at 542,000 ETH, valued at approximately $1.3 billion.

This large sum has raised concerns about its potential impact on the market if sold.

Blockchain analytics firm AMLBot confirmed OXT Research’s findings through an independent investigation. An AMLBot representative noted that the remaining Ethereum was distributed across numerous wallets and began moving in August, eventually being consolidated into 294 separate addresses.

The movement of these funds comes after a period of dormancy. In early August, the Ethereum assets seized from PlusToken showed on-chain activity for the first time since 2021.

This awakening of previously static funds has drawn attention from market observers.

Calvin Ferreira, head of ecosystem and growth at Bitcoin layer-2 network BitcoinOS, commented on the potential market impact, stating,

“Given that the total amount involved is about $1.3 billion, any significant liquidation could dramatically increase selling pressure, leading to a further drop in Ethereum’s price.”

Anmol Jain, head of investigations at AMLBot, echoed these concerns, suggesting that the movement could lead to increased sell pressure, worsen market sentiment, and potentially cause a liquidity decline.

However, he also noted that the actual impact would depend on various factors, including the amount of ETH involved, the timing of the transfers, and the overall market context.

It’s worth noting that the PlusToken case resulted in one of the largest cryptocurrency seizures to date.

Chinese police confiscated approximately 1% of Bitcoin’s total supply, along with significant amounts of other cryptocurrencies, including over 830,000 ETH, 1.4 million LTC, 27 million EOS, and others.

In 2020, Chinese authorities prosecuted six PlusToken team members.

A court document from that time revealed that the seized assets were transferred to Zhifan Technology Beijing for liquidation, with the intention of eventually distributing the funds to victims of the scheme.

According to OXT Research, it is believed that the seized Bitcoin was sold on exchanges, and some of the Ethereum was liquidated, leaving the current 542,000 ETH remaining.

As of the latest data, the price of Ethereum has shown a slight decline of 1.5% over the past day, trading at around $2,448. However, it remains relatively stable over the past week, according to data from CoinGecko.