HOW TO STEAL $ 3 BILLION

    13 ديسمبر 2021
    248 الآراء

    It only took the Chinese scam project PlusToken a year to collect about 1% of all existing bitcoins from gullible investors.

    PlusToken is a fraudulent China-based crypto project that spread through Asia like a wildfire, with some of its loci also discovered in Europe and North America. It managed to raise around $ 3 billion in total. To appreciate the scale of the scam: at that time, it was approximately 1% of all bitcoins in circulation.

    The story only lasted a year. Or the entire year, considering how fast time flies in the crypto business world. At the end of June 2018, the first mentions of PlusToken appeared in groups in the popular Chinese messenger WeChat. And at the end of June 2019, the Chinese authorities arrested several dozen top managers of the PlusToken pyramid, which then ceased to exist. Just one year – and a billion-dollar swindle.

    The main culprit of the scam was, without a doubt, a talented person – there is a reason why they still haven’t been found (along with most of the money raised). However, the scheme itself was quite simple: in fact, it was a classic financial pyramid straight from the second half of the 19th century, with a dash of 90s NLP techniques, and covered in a crypto wrapper.

    In short, the PlusToken project promised its clients (or “investors”, as they were called) a 10% to 30% monthly yield. For this, they had to purchase PLUS tokens using other cryptocurrencies – the trade-off took place on popular exchanges. Nothing else was required of users: they were promised dividends from simply storing their digital assets in the PlusToken wallet.

    And if you wanted to make more, you could get involved in the recruitment process. The multilevel marketing scheme worked perfectly: someone who actively attracted new “investors” could raise their status to “Big Boy” or “Great God” levels.

    The clients (who made up the PlusToken community, which the organizers cared a lot about) were not professional investors, rather ordinary Internet users, caught in the cryptocurrency hype. They were easily fooled: as laymen, they didn’t understand much about the blockchain or Bitcoin, not to mention altcoins and tokens.

    Instead, they all heard constant media stories about people and businesses making fortunes out of thin air on cryptocurrencies. And PlusToken was eager to satisfy those wanting to get rich quickly – they “taught” their unsuspecting “investors” how to buy Bitcoin, ETH, and EOS in order to make their “investments” in the project.

    Today we understand how everything happened. At first, the “unique enrichment strategy” was advertised through WeChat, the most popular messenger in China. Later, the ads spread to other digital platforms. Then PlusToken started holding meetings (they called them “salons”), street actions, personal workshops for activists that taught them to promote the platform to potential new users (and future victims of deception). In China and other countries of Southeast Asia, you could even see ads for the crypto project in grocery stores.

    At the “investors meetings”, everything happened as if taken directly from the 90s financial pyramid textbook. We see the footage of hundreds of people gathering in luxurious locations, covered in bright projector lights with K-pop music in the background. The visitors are absolutely ecstatic, ready to “voluntarily” give everything they have to the pyramid organizers.

    According to the project’s internal data, at least three million people were deceived this way. Analyst company CipherTrace estimates that the number of victims could potentially exceed four million; some experts give even more impressive figures. The scammers primarily targeted citizens of China, South Korea, Japan, and many other Southeast Asian countries, tempted by easy profit. However, people were defrauded across the globe, including in Russia, Germany, the USA, Canada.

    Still, the criminals’ #1 focus was China. They even made an application to instantly convert Chinese yuan into BTC, LTC, ETH, EOS, and other cryptocurrencies, so that they can then be immediately exchanged for PLUS tokens. Based on the investments made and the number of new clients they brought into the scheme, the earlier users received dividends – but only in PLUS tokens. Those were clearly stamped out in the required quantity by the pyramid organizers, who didn’t even bother to develop any kind of public business model for the project.

    At its peak (from March to June 2019), PLUS tokens reached $ 17 billion in capitalization, with the highest price of $ 340 per coin. If the currency could get on CoinMarketCap (which is something the creators of the project really wanted), it could have at one point become the third-largest asset. Those who managed to withdraw the project’s cryptocurrency into other coins or fiat managed to make real profits. PlusToken clients who held on to the scam tokens ended up losing everything.

    As the legend goes, PlusToken was developed by a South Korean team of programmers led by the founder of the company, a certain Mr. Leo. There was no other information on the site besides the name. As we have already mentioned, the project head hasn’t been identified to this day.

    The pyramid collapsed after multiple scam associates were detained on June 25 in Vanuatu, the island-state in the Pacific Ocean where the criminals had established their headquarters. In total, 27 main suspects in the organization of the cryptocurrency scam were captured, as well as 82 other key members of the group.

    For a short while, the whole system worked by inertia. The project users first raised the alarm about the impossibility of withdrawing money from PlusToken after June 28. At that moment, PlusToken employees tried to reassure people that the issues were caused by an attempted hack. However, in just a few days, the pyramid collapsed, accompanied by flashy media headlines.

    An investigation soon revealed that the large-scale crypto withdrawal began in March 2019. The project organizers were sending cryptocurrency to their wallets and from there to cryptocurrency mixers or used the CoinJoin technology. It is now clear that the pyramid founders had been preparing for the exit scam in advance, so the Chinese law enforcement only caught them in the final stages.

    As a result, Mr. Leo, the project leader, remains at large; their identity is unknown. The funds flowed to numerous wallets in different cryptocurrencies. The schemes used were so complex that experts are still trying to sort out all the transactions and track the assets. The money partially collected from “hamsters” has already been cashed, which was even associated with several drops in the Bitcoin price in 2019.

    In total, the pyramid organizers were able to get more than 200,000 Bitcoins (about 1% of all the first cryptocurrency emitted), 789,000 ETH, 26 million EOS, and some other assets from gullible “hamsters”. It’s doubtful that we will ever learn the precise amount of the assets stolen.

    If you recalculate their value in today’s prices, it turns out to be more than $ 15 billion! Law enforcement officers could find and seize some of the money, but most of it is yet to be found. And, most likely, it will remain this way.

    Today, we can confidently state that it was one of the largest pyramids (as well as exit scams) in cryptocurrency history. The crypto community has been taught a valuable lesson, but there are still plenty of naive and greedy people in the world. And scammers are becoming dodgier. Next time we will look at a smaller but much more “cunning” crypto scam.

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