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- China’s Ministry of Public Security released a report claiming that they have arrested all the 27 major suspects of the Plus Token Ponzi scheme.
- The alleged organizers of this fraudulent scheme are accused of defrauding around $3 billion from the crypto traders.
- This led to a major manhunt and the Chinese officials apprehended the 82 key members of the scheme.
China’s Ministry of Public Security released a report claiming that they have arrested all the 27 major suspects of the Plus Token Ponzi scheme. This report was released on 30th July 2020. The alleged organizers of this fraudulent scheme are accused of defrauding around $3 billion from the crypto traders.
Details of the Fraudulent Scheme
‘Plus Token’ was a cryptocurrency counterfeit scheme masquerading as an investment program with guaranteed high returns. The scammers withdrew $3 billion in Cryptocurrencies including Bitcoin, Ethereum, and EOS. When they abandoned the operations of the scheme they left a note behind stating “ sorry we have run”.
This led to a major manhunt and the Chinese officials apprehended the 82 key members of the scheme. These massive arrests completely demolished the big multinational network MLM organization. The organization had much influence in Korea and China. Also, they targeted investors who were new to crypto trading and had comparatively less knowledge about it.
This Ponzi scheme came into existence in early 2018 and soon came under the radar of the National Security forces as a pyramid scheme. In June 2019 many investors complained that they could not withdraw their funds and this issue was resolved as they claimed it to be a ‘hacker attack’.
Plus Token managed to scam some 2 million participants. The pyramid has grown to over 3,000 layers since last year. According to sources, the total amount of digital currency involved exceeded 40 billion yuan.
How did the Ponzi Scheme Function?
The Plus Token lured unsuspecting traders by providing lucrative high-yield returns on low investments. They maintained an illusion that the funds were used to develop cryptocurrency-related products. However, the returns were generated by distributing new and recent investments to pay off older members.
Not only this but it also had a strong referral element. Meaning huge bonuses were awarded to those investors who referred friends and family into the scheme. So the members started referring to their friends and family and a large scale trader base was formed.
