During the later part of June, 2019, complaints from Plus Token e-wallet users in China, South Korea and Japan about their inability to withdraw from their account, had prompted Chinese law enforcement authorities to act swiftly. Their initial investigations led to the arrest of six (6) Chinese nationals working as core team of the Plus Token mobile wallet operation.
Dovey Wan Blows the Whistle on Plus Token’s Ponzi-Like Scheme to Alert the Cryptocurrency Community
News of the arrest did not receive wide coverage, which apparently was still under investigations. However, in early July, Dovey Wan, co-founder of cryptocurrency company Primitive Ventures noticed that the Plus Token site was moving out digital money in small amounts.
The movements made use of e-wallets not registered with the company when traded with crypto exchangers Bittrex, Binance and Huobi.
Although Ms. Wan tweeted about a possible Ponzi Scheme happening at the Plus Token site, cryptocurrency exchangers were unable to identify which e-wallet to block, since there were no digital currency transactions directly related to Plus Token.
Apparently, the Plus Token scammers have taken advantage of the sophisticated blockchain system of recording transactions. In using encryptions containing public and private key codes instead of real information about traders, the blockchain system makes it difficult to immediately trace and establish the identity of persons involved in cryptocurrency transactions.
As Dovey Wan had found out and later tweeted, unidentified Plus Token operators still at large were able to transfer around 70K Bitcoin(BTC) and 800K Ethereum (ETH) early in July. Ms. Wan summed up the entire amount that Plus Token had stolen from its investors, and arrived at an overwhelming estimate of about $3.2 billion-worth of cryptocurrency. .
The major players behind the Plus Token Ponzi-scheme still has control over the stolen cryptocurrency. Since July, they have have been transferring the digital money into different crypto wallets from which they can withdraw and convert the cryptocurrency into real money.
Crypto-Analyst Firm Reports that Plus Token Scammers Used Online Mixing Services to Pre-Launder the Stolen Cryptocurrencies
A related report coming from Token Analyst, a London-based crypto-analytic firm, said that the Plus Token scammers have been using online mixing services as a means of masking the origins of their fraudulent blockchain transactions even before the scam was discovered. Doing so enabled the fraudsters to trade the stolen digital currency at legitimate exchangers since the cryptocurrency online mixers were able to mix the money in different e-wallet accounts owned by Plus Token.
That being the case, the stolen money have been laundered and made to look like legitimate funds used for conventional transactions via the blockchain platform.