The Chinese authorities have confiscated a total amount of $4.2B which includes $3.3B worth of Bitcoin. The seizure was a result of a massive crackdown against PlusToken Ponzi scheme. Aside from BTC, 833,083 ETH, 487 million XRP, and 79,581 BCH including 27.6 million EOS, 6 billion DOGE, 74,167 DASH, and 213,724 USDT were also confiscated.
According to reports, the confiscated cryptocurrencies were part of a $50B “Blockchain Scam”. Plustoken was a pyramid scheme that pretended to offer high-yield returns after people deposited funds into the system. This is also believed to be the first large-scale transnational network pyramid scheme that used blockchain technology and digital currency as a transaction medium in China.
On July 31, 109 people were arrested by authorities. Out of this, 27 were allegedly masterminds and 82 are key members. The scammers swindled a total of $5.7B from unwitting 2 million investors in their platform.
Prior to this, six people were arrested last June related to the scam. But the stolen funds have continued to move through wallets and were cashed out through independent OTC brokers working on the Huobi platform. This has been a clear indication that other perpetrators are still on the move.
On July 2, the case was heard in court. A judgment was made public on Nov. 19 by the Jiangsu Yancheng Intermediate People’s Court revealing the detailed breakdown of the cryptocurrencies confiscated by the Chinese authorities.
With regards to the seized digital assets, the court stated :
“The seized digital currencies will be processed pursuant to laws and the proceeds and gains will be forfeited to the national treasury.”
But there were no further details given on how this will be carried out.
There were a total of 15 people convicted in connection with the case. They received a sentence from two to eleven years and jail and were fined from $100,000 to $1 million.
The U. S. Department of Justice has been actively involved in the seizure of cryptocurrencies associated with crypto scams. The agency recently aided Brazil in confiscating $24M worth of digital currency in a crypto fraud scheme known as “Operation Egypto.”
The promise of a high profit has made it easier for these scammers to lure their victims to invest in this Ponzi scheme. Crypto scams have been on the rise despite efforts by authorities to educate investors to be on the watch for shady companies that promises high profit overnight. If it’s too good to be true, it must be a scam.