PlusToken was perhaps the biggest scam in crypto history and ultimately stole upwards of $3 billion after temporarily becoming a national investment sensation in China, followed by the owners running away. The PlusToken story is certainly an infamous part of crypto history and will be discussed in-depth in this article.
The Laundering And Dumping Of The $3 Billion Of Stolen Crypto Is Hurting The Market To This Day
Before diving into PlusToken’s history, it is important to note that the PlusToken scam is still causing significant negative impacts on the crypto market.
For example, on June 24 790,000 Ethereum (ETH) worth $188 million moved from the wallets which contain PlusToken’s stolen crypto, and only a couple of days earlier 26.3 million EOS worth $67 million were moved from PlusToken’s wallets. Further, in February $117 million of PlusToken’s stolen Bitcoin (BTC) was moved.
The very movement of these funds causes fear and selling in the crypto market, even if the PlusToken funds are just being moved and not actually sold. This is because relative to the liquidity of the crypto market, these $100+ million chunks of crypto would be enough to crash the market if they were sold all at once, and the fear of such an event causes traders to panic sell their crypto.
In other words, when the PlusToken funds move it almost always causes crypto market bearishness. For example, when the $188 million of PlusToken’s Ethereum (ETH) moved on June 24, the price of Ethereum (ETH) quickly slid from $248 to $233, breaking an uptrend that had been in place for over a week. Further, it seems all other major cryptocurrencies dropped sharply at the same time.
Another factor is that over time the PlusToken crypto actually is being dumped, perhaps not all in a $100 million chunk but via sizeable and persistent over the counter (OTC) trades, and this has likely suppressed crypto market prices.
Notably, the negative effect of PlusToken’s coins being moved is so strong that it seems to temporarily overwhelm any positive sentiment in the market, and therefore traders and investors need to be aware of the ‘PlusToken factor’
A Brief History Of PlusToken
PlusToken may have turned into the ultimate crypto scam, but it was similar to any other ponzi scheme. PlusToken enticed people to invest by offering 9% to 18% profits per month on the original investment, under the guise that PlusToken was using the investments to earn legitimate profits via launching crypto related businesses, like an exchange and wallet.
However, any company offering 9% to 18% interest per month is likely a scam, since not even the best crypto business can promise guaranteed monthly returns, since the crypto market is so volatile.
In reality money from new investors was being used to pay the dividends of older investors, and this got investors excited because it seemed that PlusToken really was making money.
Also, like other ponzi schemes, PlusToken gave much higher interest per month to people that invested more, and PlusToken paid people commissions to get friends, families, and strangers to invest. This created a frenzy where countless people were aggressively marketing PlusToken in China.
One of the main factors in favor of PlusToken was the fact that China banned both initial coin offerings (ICOs) and crypto trading in 2017. Before China banned crypto, China was the ultimate crypto hot spot with a large majority of crypto trading volume occurring in China.
Therefore, after China banned crypto there was a major thirst for both ICOs and crypto trading. PlusToken satisfied China’s crypto appetite, since PlusToken was an ICO, and PlusToken launched a crypto exchange which allowed the trading of Chinese Yuan (CNY) for several major cryptocurrencies.
Ultimately PlusToken got so popular that it achieved a market cap of $17 billion, which would have made it the #3 crypto in the world if CoinMarketCap listed it. This far overshadows the highest Bitconnect market cap which was just $0.12 billion, indicating that PlusToken was even much bigger than Bitconnect and likely the most prolific crypto scam in history.
PlusToken’s Demise Decimated The Crypto Bull Run Of 2019
PlusToken reached its peak in March through June 2019, coinciding with a Bitcoin (BTC) rally from $3,800 to $13,800. This actually raises the question, did demand from people buying billions of dollars of crypto to participate in PlusToken actually help cause the 2019 crypto bull run? It seems quite possible, but no one has done a study on this apparently, so it cannot be confirmed.
Regardless, it is certain that PlusToken ended the crypto bull run of 2019. Right when PlusToken shut down and ran away with the $3 billion, the crypto market crashed, with Bitcoin (BTC) falling from $13,800 to below $10,000 in less than one week. This was likely due to PlusToken dumping a large amount of crypto right when they pulled the exit scam, and the crypto bull run of 2019 never came back after that.
Thus, PlusToken was one of the biggest crypto scams in history and stole $3 billion, and in 2019 PlusToken caused one of the biggest market movements of the entire year, in particular the sudden crash following the 2019 crypto bull run. Also, to this day PlusToken is having a significant negative impact on global crypto markets, since anytime they move coins it sparks fear and panic selling. It remains to be seen when PlusToken will finally no longer be a factor, and for the foreseeable future it seems PlusToken moving and dumping its coins will occasionally crash the crypto markets.