PlusToken Ponzi — June 2019

PlusToken styled itself as a non-custodial wallet with a built-in "AI trading" yield programme that promised 6-20% monthly returns on user deposits. The marketing operated as a multi-level recruitment scheme: existing users received bonuses for new sign-ups, with progressively larger commissions for higher recruitment volumes.

At peak the operation claimed roughly 3 million users and was the largest crypto holder in China and South Korea. Total deposits, by Chinese police estimates, exceeded $2 billion in BTC, ETH, EOS, DOGE and other tokens.

On 27 June 2019 PlusToken announced it could no longer process withdrawals, citing "hacker" interference. The same week, six members of the leadership team were arrested by Vanuatu authorities at the request of Chinese police and extradited. Chinese prosecutors charged 109 defendants between 2019 and 2020. In November 2020 the Yancheng Intermediate Court convicted 27 of the principal organisers, with sentences ranging from two to eleven years.

Chinese authorities seized approximately 194,775 BTC and 833,083 ETH along with smaller quantities of other tokens. Documentation of subsequent government sales has been opaque, but on-chain analysis by Chainalysis and others traced large outflows from PlusToken-identified addresses correlated with significant BTC price drawdowns throughout 2020.