Ponzi scheme funds have resurfaced as hundreds of Ethereum wallets, inactive for over three years, have moved significant amounts of ETH. These funds were originally seized by Chinese authorities in 2021 from a large-scale ponzi scheme. This movement has sparked speculation about a potential massive dump of ETH and other cryptocurrencies in the near future. Following this transfer, Ethereum’s price has been under bearish pressure, dipping below the $2500 support level. Market participants are closely monitoring whether further large-scale movements of ponzi scheme assets will impact other cryptocurrencies.
China Shifts $2 Billion In Ethereum
Blockchain analytics firm Lookonchain reported that wallets linked to the infamous Plus Token ponzi scheme, named “Plus Token Ponzi 2,” recently transferred 789,533 ETH, worth approximately $2 billion. These funds had been dormant since April 2021 and were originally distributed across several addresses in 2020. This sudden movement, detected just hours ago, has sparked speculation about the involvement of scammers manipulating the Ether reserve seized by Chinese authorities in connection with the ponzi scheme.
Despite this speculation, there is no official confirmation, and many believe the Chinese government may be acting on the seized crypto assets. The Plus Token scam remains one of the largest ponzi schemes in crypto history, with Chinese authorities confiscating a vast amount of digital assets during their crackdown. As the funds move, the market is closely watching for potential large-scale sell-offs that could impact Ethereum and other cryptocurrencies tied to the ponzi scheme.
ETH Loses Hold On $2,500
The confiscated cryptocurrencies from the ponzi scheme included 194,775 Bitcoin (BTC) worth $11.2 billion and 833,083 Ethereum (ETH) valued at $2.11 billion. This massive seizure stems from a fraudulent operation that began in 2018, where the ponzi scheme falsely advertised a crypto arbitrage trading platform that never existed.
The scheme lured over 2.6 million users, promising high returns on investments, but ultimately collapsed. As a result, more than 15 individuals involved in orchestrating the scam were convicted, receiving sentences ranging from 2 to 11 years. Along with Bitcoin and Ethereum, Chinese authorities also seized significant amounts of other cryptocurrencies from the ponzi scheme, further emphasizing the scale of the fraud.
These events underscore the importance of regulatory actions in addressing such fraudulent schemes, which continue to exploit the growing interest in crypto markets, while also raising questions about what will happen to the confiscated digital assets.
Here is the detailed list:
- XRP: 487 million XRP ($252 million)
- Bitcoin Cash (BCH): 79,581 BCH ($25.8 million)
- Litecoin (LTC): 1.4 million LTC ($82.3 million)
- EOS: 27.6 million EOS ($12.7 million)
- DASH: 74,167 DASH ($1.7 million)
- Dogecoin (DOGE): 6 billion DOGE ($609 million)
- Tether (USDT): 213,724 USDT
The reallocation of these funds occurs amid increased volatility in the crypto market, driven by geopolitical tensions and recession concerns. Large transfers of seized assets can significantly influence market prices, causing fluctuations that traders and investors closely monitor. The actions taken by Chinese authorities regarding these assets are particularly scrutinized by the crypto community, especially given the history of the ponzi scheme that led to these confiscations.
As of now, the next steps regarding the remaining seized assets, which include Bitcoin and XRP, are uncertain. Ethereum, in particular, has struggled recently, losing its grip on the critical $2,500 level. On Wednesday, August 7, the ETH price fell to $2,400, representing a 4% decline from a 24-hour high of $2,551.56. Additionally, a $30 million selloff of ETH by Jump Trading contributed to the downward pressure on prices.
During this market decline, Ethereum’s market capitalization decreased by 4.80%, bringing it to approximately $288.42 billion. Trading volume also experienced a notable drop of 22.85%, falling to about $23.41 billion within a 24-hour period. This combination of market factors and large asset movements underscores the interconnectedness of the cryptocurrency ecosystem, where external influences can lead to significant market shifts. Investors remain vigilant, anticipating further developments from the Chinese government regarding the management of these substantial seized crypto assets. The ongoing situation highlights the volatility inherent in the crypto markets, where regulatory actions and significant fund movements can create immediate impacts on asset prices.
