PlusToken, a provider of custodial and stock exchange services, was believed to have approximately 4 million users. CipherTrace estimates investors' deposits at $2.9 billion, but the real amount may be different, as the exact number of PlusToken addresses is unknown. China's law enforcement agencies are also investigating.
Six PlusToken members have been arrested, confirmed by the Yancheng City District Public Safety Bureau. In June, the South China Morning Post reported that six Chinese nationals had been detained on the Vanuatu Islands for organizing online fraud. The name of the fraud scheme was not specified in the publication, but soon the network heard rumours that the detainees might be connected to PlusToken.
Last week, the Yancheng prosecutor's office confirmed the investigation of the activities of six persons allegedly involved in the financial pyramid. The Yancheng Public Security Bureau reported that police are still looking for the main operators of the fraudulent scheme.
While the investigation is ongoing, the attackers continue to move the embezzled funds between wallets, according to CipherTrace. For example, on August 13, 15,000 BTCs were transferred from one alleged PlusToken wallet to another, and later 22,922 BTCs.
A number of market participants linked these transactions to this week's decline in the rate of Bitcoin. At the same time, TokenAnalyst claims that it could not find any evidence of PlusToken bitcoins getting into the stock exchanges.
However, this is not the first incident of its kind in China. With the spread of financial services on the Internet, citizens are increasingly becoming victims of fraud. The organizers of one of these schemes deceived more than 220,000 people who were invited to participate in the peer-to-peer lending program and appropriated about $16 billion. Currently, there are several projects that resemble PlusToken in their structure, including Cloud Token, S Block and V-Dimension (VDS).
PlusToken was launched in early 2018 and by September was suspected of organizing a financial pyramid. This June, the company panicked Chinese and Korean investors when some users began to report that they could not withdraw assets from their wallets. Later, the problems were attributed to a hacker attack, and on August 5, the platform posted reports that it would soon begin to process withdrawal requests.