Plus Token
“Plus Token” was an investment platform in the guise of a cryptocurrency Ponzi scheme.
Plus Token provided huge “investment” incentives to unsuspecting victims.
Plus Token is a classic Ponzi scheme that invites unsuspecting victims to invest with high return guarantees and low investment.
Plus Token was an investment platform in the guise of a complicated cryptocurrency Ponzi scheme. Network administrators terminated the service in June 2019. Fraudsters dropped the program by removing more than $3 trillion in Cryptocurrencies (Bitcoin, Ethereum, and EOS) and leaving the “sorry we’ve fled” text. This has culminated in a global search for Plus Token project managers and developers.
In Korea and China, PlusToken became very popular, especially among investors not familiar with cryptocurrencies. Plus Token was a high-yield investment scheme that provided huge “investment” incentives in China and Korea to unsuspecting victims. The project offered monthly returns of 9 to 18 percent on investment–with more bonuses given for more significant investments. This type of investment is similar to other high-yield investment schemes such as “Bitconnect,” which failed in January 2018. Don't use plagiarised sources.Get your custom essay just from $11/page
Plus Token is a classic Ponzi scheme that invites unsuspecting victims to invest with high return guarantees and low investment. Plus Token created an impression of sustainable business by claiming to use the funds to develop products relevant to cryptocurrencies such as the Plus Token Wallet and Exchange. Returns, however, are created by dividing new investments to pay off older members. What classifies this as a Ponzi Scheme is the illusion of sustainable business, as victims believe that they are investing in a market that generates high returns.
Plus Token also had an active referral component that gave any participant who referred friends and family to the scheme enormous rewards. Investors have been divided into four “tiers,” depending on how much they have invested and how many other referrals they can make. This meant the higher the return, the more a member referred. Members began referring their friends and family to invest large amounts of cryptocurrencies, including Bitcoin, Ethereum, EOS, and Litecoin.
Until now, the PlusToken scammers have cashed out at least $185,000,000 worth of Bitcoin from OTC traders. Many monitoring cryptocurrency markets know that large liquidations continue to suppress Bitcoin’s value in general, and others have wondered whether cashouts linked to PlusToken pull Bitcoin down. Concerning PlusToken cashouts, it decided to run an analysis of Bitcoin’s value via Huobi OTC brokers to try to answer the query.
It cannot say for sure that cashouts from PlusToken trigger the dropping value of Bitcoin. Price drops that coincide with the cashouts but are caused by something else. In an attempt to resolve the correlation problem, a regression analysis performed to check how the rise influenced Bitcoin’s price volatility in trade volume between September 23rd and 28th. Frequently it would be tested how to trade amount affects the price itself, but for the period measured (on September 24th), there is only one significant change in Bitcoin price. A measure with more variation is required, and that ensures that outliers do not drive outcomes.
Unfortunately, as it is not possible to distinguish between trades made by OTC brokers in possession of PlusToken funds and all other trades made on Huobi, it cannot be said for sure which cashouts from PlusToken caused the price of Bitcoin to drop. It can say, however, that these cashouts cause increased volatility in the amount of Bitcoin, and that they significantly correlate with falling prices of Bitcoin.
The PlusToken scam is a powerful example of how cryptocurrency scams affect the public, as well as warn exchanges, law enforcement, and regulators. In this case, millions of victims of fraud are most likely never to recover the money they have fooled into giving up. Allowing OTC brokers to operate without scrutiny provides criminals with a simple, obvious way to launder their misplaced funds, and exchanges should be performing KYC and monitoring activities.